To me, the downside is pretty obvious.
As a nature reserve, the plots are off the ground to allow plant spawning to continue. Between that and the fact that it’s natural plots and so it has 0 prestige, there is no footfall at all. If we really had to make the comparison with real life, footfall would be the closest feature this game has to the equivalent of tax funding. If I could get footfall for people walking into my reserved spaces and harvesting things in areas I’m protecting from being plotted over I’d would be ok with it (though it would break other aspects of the game, so I’m not advocating it). I know there are plenty of people who visit and harvest resources there.
Honestly, I couldn’t care less about a player run economy. The game that I purchased was advertised very clearly as an MMO Sandbox, and that you could “build on a small scale or large scale, alone or with friends”. The idea that even if own the plots I’ll still be unable to actually USE them how I want without an organised group to keep it funded goes directly against that.
I’m equally amused, not your comment specifically but many over all, with how many people try to bring in-game time and real-life under the same umbrella, so they can start moving rules from one to the other. I’m certain there are plenty of people that play games as their leisure activity and to get away from real life. Surely the argument that 'It happens in real life, so it’s fine that it happens here; must be exactly what they don’t want to hear?
Out of curiousity… why? What will land tax achieve other than to give people a reason not to spend cubits on plots, and not to support the game with real money to buy cubits to get plots?