1913 – The 16th Amendment

The 16th Amendment to the Constitution gives Congress legal authority to tax income and results in a revenue law that taxes incomes of both individuals and corporations. In fiscal year 1918, annual internal revenue collections for the first time will pass the $1 billion mark, and rise to $5.4 billion by 1920.

During World War II, employment will increase, as will tax collections -- to $7.3 billion. The withholding tax on wages, which will be introduced in 1943, helps increase the number of taxpayers to 60 million and tax collections to $43 billion by 1945. In 2006, federal tax revenue will top $2.41 trillion. (Library of Congress)