Abstract: The function of taxation is notable in the aspects of encouraging the economic utilization of land resources， adjusting allotment relation of the land income， regulating the usage direction of the land， and protecting the production ability of the land resources etc. By constructing the academic model， it can be concluded that: to levy specific duty on land and land improvement is not helpful to optimize resource allocation of land in addition to increasing the revenue; to levy ad valorem tax on land and land improvement can influence the investment decision of the governments and development companies. Thus we can attain the policy target of increasing the allocation efficiency of land resources. From the current circumstances， it is an ideal choice to practice ad valorem tax rate on land and land improvement according to the date， levy on the land with high taxes， and levy on the land improvement with light taxes.