> In its ideal form, this tax would capture and redistribute the annual rental value of land; that is, the recurring value of the land excluding the value of any buildings or other improvements on top of it.

> but you see the same basic patterns everywhere. Land in the city center is worth much, much more than outlying areas.

The calculation of the "unimproved value" always perplexed me.. it seems like you're not taxed for the things you build on your land, but instead for the things other people built around your land. After all, why would property in a city be valuable if not for all the high rises, subways, and office buildings?

> it seems like you're not taxed for the things you build on your land, but instead for the things other people built around your land.

Correct.

The article includes a section on land valuation that gets into those details.

this is the idea - if theres a lot of value around you, you should build to make sure you are meeting the bar of whats around you in terms of economic activity.

if you build even more and get more out of the land than whats around you, you essentially get a lower tax rate until your neighbors catch up.

if you lag behind, you pay a premium in taxes to not develop

It, in effect, turns out not really to be a land value tax at all. It turns out to be a tax on the most valuable thing that _could_ be built there because that's what gives land it's value.

So you're completely correct, the value of the land changes with what's around it because it opens up new options for what someone might build there.