Why would a land value tax shift the allocation of land between uses? The amount of the tax doesn't depend on what the land's being used for. If renting is the highest-value use without the tax, it will still be the highest-value use with the tax.
> Why would a land value tax shift the allocation of land between uses?
For the same reason that inflation shifts the allocation of money between investment opportunities.
When there's an increased baseline cost that has to be overcome by whatever use the underlying asset is put to, it shifts the incentives and the risk-reward calculations of people deciding what to do with their assets.
Why would land be any different from cash in this regard?
