Even under the Articles of Confederation, the predecessor to the United States Constitution, the states had power to tax their residents. However, that power was a loosely enforced power, and did not mandate that taxes collected be turned over to Congress. Then, with the adoption of the United States Constitution in 1787, the federal government obtained the power to “lay and collect taxes.”
However, even with the ratification of the Constitution, income taxes made up a very minimal amount of the government’s total revenue. In response to significant revenue concerns, the Sixteenth Amendment was adopted in 1913. The Amendment expanded the power to lay and collect taxes without apportionment among the states and without regard to each state’s population. However, it took time for the Bureau of Internal Revenue to organize the income tax. The need for revenue only increased with the beginning of World War I, which, even prior to the U.S.’s involvement, caused a decline in international trade and revenue. WWI thus became one of the main catalysts that molded income taxes into the general form that we recognize now.