The Sixteenth Amendment

XVI
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

One of the most interesting things about this amendment is how long we went without it. It was adopted February 3, 1913.

That is not because there were not federal taxes before, but a question came up in another case, Pollock v. Farmers' Loan & Trust Co, about taxes on income through property owned, as opposed to a tax on the property itself. This is important because as such it was seen as a direct tax, which needed to be apportioned. The wording of the amendment directly takes into account what had previously been necessary for taxation, and what would no longer be.

In some ways it feels inevitable that it would happen. Many people do not own property but do have incomes. Previous governing models have given more weight to land owners, and some founding fathers may still have had that in mind, but it is not ultimately how the Constitution was written.

One thing that is interesting in retrospect is to see the rate at which states began adopting income taxes. The Constitution did prohibited a state income tax before, but only Wisconsin and Mississippi had them in place. (Hawaii had an income tax, but was not yet a state.)

http://taxfoundation.org/blog/when-did-your-state-adopt-its-income-tax

After the 16th amendment, a state income tax becomes increasingly common. The fastest period of growth was in the 1930s, during hard economic times, so following the federal example is not the only motivation, but I do think that the federal income tax could have legitimized the idea of a state income tax.

The other thing that seems worth pointing out is that in a previous election cycle there was a lot of focus on who does and does not pay federal income tax, but that is only one part of the overall tax burden, and a part that did not exist for taxpayers until just about one century ago.