> That would be either unreasonably punitive [...]
If it was levied on the value of the land alone, there's no such thing as unreasonably punitive: land values would just drop until the tax is priced in.
If you look purely at economic efficiency, and leave out any morals about _who_ should be taxed, the only thing keeping taxes from going up all the way to taking everything is economic inefficiency. Ie if you heavily tax a particular widget, people will produce fewer widgets.
Land is fixed. You can't produce it, thus no tax can interfere with its supply. (Unless it's a tax system that incentives you to keep your land off the market, like negative gearing in Australia (https://en.wikipedia.org/wiki/Negative_gearing).)
However, if the tax was levied on the value of land plus building on it, a high tax would discourage building houses---whose supply is emphatically not fixed.
If it was levied on the value of the land alone, there's no such thing as unreasonably punitive: land values would just drop until the tax is priced in.
If you look purely at economic efficiency, and leave out any morals about _who_ should be taxed, the only thing keeping taxes from going up all the way to taking everything is economic inefficiency. Ie if you heavily tax a particular widget, people will produce fewer widgets.
Land is fixed. You can't produce it, thus no tax can interfere with its supply. (Unless it's a tax system that incentives you to keep your land off the market, like negative gearing in Australia (https://en.wikipedia.org/wiki/Negative_gearing).)
However, if the tax was levied on the value of land plus building on it, a high tax would discourage building houses---whose supply is emphatically not fixed.