We already tax utility users based on “usage”, but the cost to provide service is more like y=mx+b with a very large b and small m. Charging based on usage is just a way to allocate the large fixed costs amongst your users. (Electricity may be the exception with higher variable costs, but still significant fixed costs.)

But even if you’re not using them, the utility services (water, power, sewer) still have to pass by the property. Power lines and poles are there, they have to be maintained, your water main can’t be leaking, etc. There are real costs to do all that.

> Empty land isn't using any of those things

It doesn't have to use them to benefit from their proximity. Land in the middle of a barren desert is usually worth far less than a similar piece of land near a populous city.

Sure, your point? The government benefits on the higher sale tax revenue too. It's only a true benefit when something is realized. The densest areas of many cities are seeing decreases in population, so maybe that infrastructure isn't the main driver of value.

The point of a land value tax is to incentivise that realisation. In prosperous cities the reduction is inner city population is due to land being used commercially, and maybe up to a point that's fine. You can always adjust the value tax based on type of actual usage. The important thing is that it's used efficiently in a way that benefits the community.

"In prosperous cities"

Yeah, but we are seeing that many cities are not prosperous and are seeing population reductions. You can't will the creation of value. Just because it gets taxed like the land will create value doesn't mean it actually will.

"in a way that benefits the community."

These taxes don't guarantee this at all. There could be any number of uses, many of which could be detrimental or wasteful (and this will vary based on perspective as not everyone wants the same thing).

So we're paying for all those facilities, infrastructure and so on, and it's going to waste. That's inefficient. We want that land being used productively, contributing to the economy, making profits which pay taxes, to pay for these services.

You're leaving out the usage/ capacity side. If you actually fill all the empty spaces, you'll need to add additional facilities. Current facility usage is usually near capacity already.

That's not universally true. The sewer system in my town was overbuilt in anticipation of a development that fell through. That's why sewer / water bonds are typically up for vote separately from property taxes because there's such an interplay with development.

That's still cheap when you're looking at the whole picture. Sewer is much cheaper than police, EMS, road construction/maintenance, schools, etc.

Sure, to some extent, but overall it's clearly in our interests to have that land be used productively. If we want some land to be fallow, as policy, again there are better options than it just being underdeveloped, such as park land or gardens.

"but overall it's clearly in our interests to have that land be used productively."

Sure, but the real question is what does one consider productive enough? Should we tax a single family home at the rate of an apartment building just because the zoning changed? My opinion is that this type of scheme will be abused to force some people out of their homes in the name of benefiting society. My guess is developers and apartment companies can "persuade" politicians in many areas to change zoning to force people out, possibly the "wrong" kinds of people.

If you want productive uses, then you'd be better off charging a vacancy tax to already developed property. You wouldn't be able to fill all those spaces because the physical economy has shrunk, or people don't want to live/work in a rundown area, etc. There's plenty of open commercial real estate around me. The problem is you don't have customers to support the businesses that already exist.

If you really want to micromanage property types you could always adjust the land value tax based on actual usage.