This paper reviews Adam Smith’s theory of land rent recently established, and takes a new look at how it works for the analysis of contemporary economies in the Wealth of Nations. We will show that despite later erroneous criticisms, Smith’s theories of land rent and value are formally compatible and coherent, casting light on the basic tenet of classical economics, which is more interested in the productive aspects together with the institutional factors of the economy. In addition, Smith’s theories of distribution and value form the basis of his discussions of mercantilism and taxation and obtain in various applied economics within his writings. Finally, we provide some policy implications for a modern economy borne by all these, which offer a pioneering argument in the aspect of the validity of taxation on economic rent.