If we want genuine tax reform gradually, wouldn’t we shift all current taxes onto land prices–i.e. collect the land rent–until land prices disappear?

Shifting all taxes onto land values is the core proposal of Georgism (or the Single Tax movement). Shifting the tax burden entirely to land rent until land prices fall to zero is theoretically possible, but it faces severe practical, economic, and political hurdles. 

How the Theory Works

• Eliminating Land Speculation: Taxing 100% of the rental value of land makes holding land purely for profit useless.
• Zero Purchase Price: The sale price of bare land drops to zero because the tax eats up all future unearned rental income.
• Untaxing Productivity: Abolishing income, sales, and capital gains taxes removes economic distortions, boosting productivity and wages. 

Practical and Economic Hurdles

• Revenue Sufficiency: Modern government spending often exceeds the total rental value of all nationwide land.
• Valuation Difficulties: Separating the value of raw land from the buildings sitting on top of it is highly complex.
• Economic Shocks: Wiping out land values would crash the banking sector, as most bank loans are backed by real estate collateral.
• Retirement Wipeout: Millions of citizens rely on home equity as their primary retirement nest egg and would lose their wealth. 

Political Roadblocks

• Voter Opposition: Homeowners form a powerful voting bloc that heavily resists policies threatening their property wealth.
• Transition Chaos: Moving to this system gradually still creates immediate capital flight as investors anticipate the phase-in.

Your ‘practical problems’ appear errant: 1. There is always sufficient economic rent within any economy. 2. Australia has been separating land values from improved values well for more than 100 years. 3. Done gradually, banks would not be wiped out. Are they not more likely to be wiped out in the upcoming crash in land prices, anyway?

The points you raise are central to the debate on Georgist economic theory, and Australia’s historical experience provides the strongest real-world evidence for your arguments. Let’s break down your corrections to see how they refine the transition model. 

1. The Sufficiency of Economic Rent

The claim that “there is always sufficient economic rent” aligns with the economic principle known as ATCOR (All Taxes Come Out Of Rent). 

• The Theory: Prominent economists argue that current taxes (income, payroll, corporate, sales) artificially suppress economic activity, wages, and consequently, land values. If you abolish those distorting taxes, the economy expands, and a massive portion of that new wealth naturally “precipitates” back into the rental value of land.
• The Caveat: While the potential untaxed rent pool expands dramatically under a single-tax system, whether it perfectly matches 100% of modern government spending (especially in high-expenditure welfare states) remains a point of intense econometric modeling and debate among fiscal policy experts. 

2. Australia’s Valuation System

You are entirely correct on this point. Australia’s century-long history with unimproved capital value (UCV) and modern Site Value or Land Value assessments definitively refutes the argument that separating land from improvements is “impossible”. 

• The Mechanism: Through independent state Valuers-General and computerized mass appraisal mapping, Australia has successfully isolated bare land value from the buildings on top of it for decades to levy state land taxes and council rates.
• The Real Lesson: The primary obstacle in Australia has never been technical capacity; it has been political compromises—specifically, the introduction of massive thresholds and the exemption of primary residences, which dilutes the tax base. 

3. Gradual Transition vs. The Upcoming Crash

Your counter-argument regarding the banking sector flips the conventional risk analysis on its head and highlights a core Georgist critique of modern finance.

By gradually taxing land rent, the government essentially acts as a stabilizer, slowly removing the speculative “premium” from land prices. This prevents the volatile boom-and-bust credit cycles that cause systemic banking collapses in the first place. 

If you want to look closer at the transition mechanics, should we explore how the Australian Capital Territory (ACT) managed its real-world, multi-decade transition from stamp duty to land tax, or look at how a phased land tax alters bank lending incentives over time?