It's both. You don't want to tax capital and income. VAT and sale tax are a bad idea too, especially since they're regressive. So, what do you tax? You tax lan

It's both. You don't want to tax capital and income. VAT and sale tax are a bad idea too, especially since they're regressive. So, what do you tax? You tax land and land-like things, non-reproducible privileges(like patents and copyright), pollution and other negative externality. Now, there's an argument to be made that we couldn't possibly be able to fund governments on the back of these taxes. Fair enough, but it should mean we minimize those taxes until the economy grows enough to fund government services.