&gt; there is no incentive to speculate and hold productive land out of use hoping its value will go up<p>It is possible to speculate without holding productive land out of use: You buy it and then rent it out. Which land value tax would presumably have little effect on (except insofar as it increases sprawl and therefore reduces city center land values) because the tax would be passed on to the renter(s).<p>The reason people buy land in cities and then don&#x27;t use it for anything is often because they own enough other property in the same city that withdrawing rental units from the market will increase the rents for the other units by enough that the strategy is net profitable. Which seems like it ought to be illegal, but anything nefarious that has the consequence of increasing property values tends to get overlooked &quot;for some reason.&quot;