or it actually includes improvement value (and improvements on neighboring land)
It typically would include rent/value resulting from improvements on neighboring land, but not on the land parcel in question. This could cause some amount of inefficiencies due to the ability to bundle/unbundle land parcels (so with a Georgist tax landowners are disincentivized to do improvements that would raise the value of nearby land, whereas without a Georgist tax they could buy up nearby land and resell it after the improvement).
It typically would include rent/value resulting from improvements on neighboring land, but not on the land parcel in question. This could cause some amount of inefficiencies due to the ability to bundle/unbundle land parcels (so with a Georgist tax landowners are disincentivized to do improvements that would raise the value of nearby land, whereas without a Georgist tax they could buy up nearby land and resell it after the improvement).