Context:

This meme was inspired by the first part of Lars Doucet’s series on land’s fixed supply, here’s a good excerpt:

What does this mean for reclaimed land? The critic would point out that if we can “make new land,” then taxing the act of holding that land ought to discourage its future production (through land reclamation) in exactly the same way that taxing the holding of buildings does. So to the extent it’s good to reclaim land, won’t we get less land reclamation the more we tax landholding?

Reclamation is an improvement

The critics are actually right about this, such a tax would discourage land reclamation. Now let’s show how taking “land” to primarily mean “location” resolves this debate: a location on Earth that is currently filled with water is still “land” in the sense of a location. It’s just not particularly useful land. There’s even a real estate term of art for such pieces of submerged land, they’re known as “water parcels.” Land reclamation fills them in and makes them much more useful, in effect improving the already-existing land. The labor and capital that converts the water parcel into a land parcel should therefore be classified as “improvement,” not as “land.”