How Income Taxes Developed in the United States

http://www.theawl.com/2013/04/a-brief-history-of-taxes-in-america

Congress immediately passes the Revenue Act of 1913, creating the first permanent income tax.  No one really notices because the vast majority of incomes are taxed at just 1%.  The mustache twirling robber barons get pretty grumpy, though.  Then Wilson plunges us into WWI and unleashes the awesome potential of the new income tax.  The top end rate jumps to 77% and revenue increases 635%.