Hi, sorry you are having these difficulties. This is not a problem that can be diagnosed over the internet, nor can specific treaments be given or discussed without a diagnosis. That being stated we can counsel and give you some generall information that may facilitate you getting a diagnosis and treatment. May I ask you how long this has been going on? Has the dog been exposed to other dogs and where is most of the itching? Dandruff and flaky skin take a little while to develop..where did you first notice the condition.
The classic cause of hair loss on the tailhead with itching is fleas. Make sure 100% the dog doesn't have fleas! I can not tell you how many times clients come into the office saying "no fleas" and we find them with a flea comb. That being declared, if the pit bull was a puppy (or adult) he may have introduced mange, a fungus or even a bacterial disease.
The basic tests that some vets might perform would be 1) general exam, 2) flea combing 3) sometimes a skin scraping, which is a test to look for mange mites. There are several types of mange that dogs can get..some mites are easily found, some are not ...There is even a type of mange that makes a dog scaly and it usually is right down the center of the back!
If your not finding fleas...definately get an exam. Some types of mange are even contagious to people, some types aren't, it may be up to a competent and concerned vet to solve this for you.
There are a myriad of other causes as well...