> In the example where a landlord has a tenant with a building that that tenant owns, the landlord knows how much they are charging the tenant, which is the primary signal of the value they can extract from that land in that situation. Hence, they can calculate a tax level they're comfortable with paying (and I posit that it would indicate the value of the land to the owner).

Yes, but... As I keep trying to make clear:

* Anyone improving the property requires some kind of protection of this investment, usually in the form of a durable ownership interest or a very long term lease, with a value chosen based on both parties' estimates of the utility of the land over that lease term.

* In turn, the rents that the landlord receives from the property can be not-too-closely related to the present value of the land. They may be higher or lower.

* In turn, the land value tax doesn't succeed in capturing the true market rent of the land when it is based upon bidding by landowners, whether we're dealing with separate owners for improvements or not.

Imagine the case of someone who entered into a long term lease (60 years? 99 years?) in 1975 to build a house surrounded by orchards in San Jose. The real value of land has appreciated >60x over that term. A land value tax would capture a tiny fraction of that value if the landowner was bidding based upon the lease returns + the present value of the land being returned in 40 years.

> Pricing can be difficult but it doesn't exist in a vacuum, there's a whole market to compare to.

The level of friction is so high that you can't solve this one with bidding; you're going to have to rely upon comparable sales and assessed/appraised values.