(1) Economic development is promoted because it is un-taxed (i.e., if land is taxed more, economic development needn’t be)
(2) The higher land tax means land-sites will be used more efficiently in order to pay the tax (land prices will fall - there surely won’t be any less land).
This paper also summarizes 233 other empirical studies that corroborate these results. In addition, this paper contains:
Ø A peer-reviewed study (in the Journal of Urban Economics) fully corrobo-rating the empirical findings in this paper. When the study was done in 1995, there were 15 cities (more now) taxing land more than buildings.
Ø Endorsements of this tax by 8 recent American winners of the Nobel Prize in economics, as well as by other well-known authorities.
Not unimportant: this tax will lower the net tax burden of most taxpayers since they get little income from land. As for all renters, a land tax increase cannot possibly be passed on to them in the long run because the price of land is completely unaffected by a land tax (its total supply is fixed, fixed).
It might then be asked, why hasn’t this tax on land values been more widespread? Primarily it is because economists and public officials don’t know how to levy it properly and are unaware of its good results. This paper explains how to counter these shortcomings.