In a time before the widespread adoption of income and sales taxes, property taxes made up the lion’s share of local government revenues: two-thirds of all revenue according to Dick Netzer, and over 90% of all taxes levied in cities of more than 30,000 according to David Beito.
…property owners and renters were subsidizing roads for the benefit of the wealthy. Real estate developers who ran private forms of mass transit (mostly streetcars) and who were in direct competition with government-financed roads were some of the biggest payers of taxes, which makes the transfer especially ironic.
It is a tragic coincidence that big government policies became popular during the same era as the automobile. History books champion Roosevelt and his New Deal, but few are willing to attribute our dependence on oil to the progressive policies that exploded during the Depression and continued through Eisenhower’s Interstate Highway System and on to this day. The big government solutions to “create jobs” drew resources from productive sources to fund projects that burdened future generations with the costs of maintenance, debt repayment, and auto dependency, as well as the abandonment of urban areas and rail infrastructure for an extended time.
This is a topic that deserves more attention. One could write a book on it.