Improvements on nearby land often make this parcel of land more valuable for some purposes and not for others, leading to theoretically split values. If it is taxed at the rate corresponding to the purpose that yields the largest value, then it encourages owners to either use it for the purpose to which it is most suited, or sell it to someone who can. There must be such people, since if nobody was willing to invest any capital required to change the land use then it wouldn’t have any value for that purpose at all.
A current owner who does not or cannot use the land for the more valuable purpose will find themselves subject to increasing taxes, which seems somewhat punitive.
Another thing I’m not sure about is land values that derive from very narrow uses. For example, suppose that a telecom wants to build a 6G tower in a particular small area and would derive large value from it. There are three suitable properties, and they are willing to pay $3M for any one of them. The alternative residential use is more like $100k each.
Does that mean that the unimproved land value of all these properties is now $3M, since there is a buyer willing to pay that much and receive enough revenue from its use to make that worthwhile? $1M since that they would definitely not buy more than one property and so it should be split three ways? $100k since they haven’t bought anything yet and who knows they might not? Some windfall tax that means the government gets almost all of the $3M purchase price?
I don’t know what Georgism says about this sort of situation at all.
Improvements on nearby land often make this parcel of land more valuable for some purposes and not for others, leading to theoretically split values. If it is taxed at the rate corresponding to the purpose that yields the largest value, then it encourages owners to either use it for the purpose to which it is most suited, or sell it to someone who can. There must be such people, since if nobody was willing to invest any capital required to change the land use then it wouldn’t have any value for that purpose at all.
A current owner who does not or cannot use the land for the more valuable purpose will find themselves subject to increasing taxes, which seems somewhat punitive.
Another thing I’m not sure about is land values that derive from very narrow uses. For example, suppose that a telecom wants to build a 6G tower in a particular small area and would derive large value from it. There are three suitable properties, and they are willing to pay $3M for any one of them. The alternative residential use is more like $100k each.
Does that mean that the unimproved land value of all these properties is now $3M, since there is a buyer willing to pay that much and receive enough revenue from its use to make that worthwhile? $1M since that they would definitely not buy more than one property and so it should be split three ways? $100k since they haven’t bought anything yet and who knows they might not? Some windfall tax that means the government gets almost all of the $3M purchase price?
I don’t know what Georgism says about this sort of situation at all.