Early Taxes

The first direct tax on Americans, specifically property owners, happened in the 1790s during the John Adams Administration. The subsequent Thomas Jefferson Administration abolished this tax.

IRS

During the Civil War, President Abraham Lincoln established the Commissioner of Internal Revenue to collect taxes for funding the war. The name was later changed to Bureau of Internal Revenue and eventually the Internal Revenue Service in 1953.

Tax Repeal

Since the government did not need to raise as much money after the Civil War, the income tax was repealed in 1872. By then the government made enough money from taxing tobacco and liquor. Congress passed a short-lived flat rate federal income tax in 1894 that was repealed the following year.

Form 1040

A national debate led to new tax laws in 1913, including the introduction of income tax form 1040.

16th Amendment

By 1913 the 16th Amendment had been approved by 36 states. The required two-thirds approval of the states for ratification was reached in 1916, the same year the Revenue Act established a tax to pay for World War I.

Tax Increases

Taxes were raised in 1918 so that the bottom bracket paid 6 percent and the top bracket paid 77 percent. At this time only 5 percent of the population paid income tax.

Source:

U.S. Department of Treasury: History of U.S. Tax System

Resource:

Taxsaversonline.com: The History of Income Tax