The first example of a levy of the nature of a special assessment may be found in Europe, yet the real development of the system can be traced through the American colonies and states. As early as the latter part of the seventeenth century provision was made in New York for the use of the principle. It did not, however, receive extensive development here, nor was it copied to any extent elsewhere until well into the nineteenth century. The real impetus to its use came with the growth of internal improvements. At present its most prominent place is found in municipal finances, although its use by counties and states is increasing with the demand for building improved roads. In a number of cities, at various times, the receipts from special assessments have exceeded those from taxes. Some of the many purposes for which it is used are for laying out and building streets, sidewalks, and roads, for lighting and sprinkling streets, for building sewers and laying water pipes, for planting shade trees, and for developing parks.
The special assessment, or betterment tax, is comparatively little used in European countries, although numerous attempts have been made to have it introduced more extensively. Great Britain has perhaps been more antagonistic than other countries, and practically all attempts to use the principle have met with such objections that they have been given up. One situation which makes its use more difficult is that land or site values are seldom used in levying taxes; the tax is levied on the base of annual rental upon the occupier rather than upon the owner of the land. The "iniquitous American scheme" is gaining ground, however, and is used to a greater extent in the countries on the continent.