Let me try to explain the orthodox economic rationale:
The idea is that we can tax land values like crazy without distorting investment decisions, if we are very careful not to tax improvements to the land like buildings. That's because the supply of land is in some sense the most inelastic economic commodity there is: they stopped making it, and you can't hide it. But, you have to be very careful not to tax the buildings---otherwise you end up with less buildings than is optimal for society.
See the Economist or Wikipedia or Google for more explanation. It's one of the few taxes that don't distort the economy.
