The problem is that it could work that way, or it might not. It depends on what tax rate the government sets, which could change depending on the time, the economy, and the current administration. If the government guesses the magic rate that discourages speculation without discouraging other relatively low-value businesses that society still needs to function, then yes, that's a great system. However, I'd the government overshoots or undershoots, then the land value tax doesn actually fix anything.