You've totally missed the point. Landlords are ALREADY passing the land rents off to tenants. The difference here is that the tax would prevent the land rent

You've totally missed the point. Landlords are ALREADY passing the land rents off to tenants. The difference here is that the tax would prevent the land rent from accruing to the landlord by taxing it away from them. It doesn't cause competition for scarce resources to stop - instead, it makes the market more efficient because everyone has to pay their land rents. A single story house in the middle of a forest of skyscrapers would suddenly be faced with a gigantic tax bill and be forced to sell. The entire goal of the tax is to ensure that profits go to the people who generate them. Landowners are almost never responsible for large increases in the value of their land.