If property taxes are normal (not capped like in California), some of the effect is mitigated, but the property value increase is still greater than the tax increase. Real estate investing as an industry only exists because of the existence of property gaining value.

Most infrastructure spending requires income taxes and transfers from the federal government, so clearly there is wealth transfer happening to the landlords.

Well, maybe it just isn't true that real estate is a perpetual money machine. If it was, yes, that would be a problem because it would eat the world. But people always exaggerate the permanence and universality of any bubble.

You can dismiss it as anecdotal evidence, but I live very far away from SF, in a place built in the early 90s, within city limits, and it has not increased in value faster than inflation in all these years.

Sorry, I replied too fast to see your part about raising rates. Yes, that's roughly in line with I propose. We raise the tax on the land to exactly how much rent you land derive from the land. And then you don't tax the structures on top at all, since we want to incentivize people building on top. This is the Georgist policy of a land value tax.

I don't doubt there are places where rent-seeking from land is not occurring. But we still need to address the places where it is a problem. And this will remain a problem as long as people require land to live, as long as centralization to cities keeps occurring (which we want more off, given its benefits).

My point is not that being a landlord has no risk or guarantees absurd returns. Rather, I'm saying that the returns from land do not come at all from the value that the landlord provides, so we should make sure those returns go back to the community that created them.