And that’s how the US ends up with horrible roads, transit quality going down, and so on.

The roads are pretty good around my area. Maybe that's because I voted for a small local tax increase for that purpose.

Assuming your correct, it probably has a lot of other contributing factors. The federal government gets by far the largest share of tax revenue, but a lot of transportation issues are felt more at the state and local level.

I doubt transportation problems are due to a lack of federal tax revenue. Keep in mind most governments in the world are smaller than a big US state. Incentives and priorities get distorted a lot when you have one entity responsible for trillions of dollars of annual expenditures.

Terrible roads seem far too local of a problem to be due to philanthropic billionaires diverting wealth. Quality seems to vary distinctly by county or city; I once lived near a city line where the line was demarcated by the abrupt transition from flawless asphalt to a minefield of potholes. Neither was a particularly famous, wealthy, or powerful county, and neither had resident billionaires.

No, I'm more suspicious of measures like California's Prop 13, as well as county and city level management.

Well, tax loopholes in general lead to less taxes. Which leads to budget cuts.

For example, look what happened in the UK: http://www.theguardian.com/commentisfree/2015/nov/11/david-c...