A Short History of the Income Tax

John Steele Gordon: A Short History of the Income Tax - WSJ.com
The new president, Woodrow Wilson, and the strongly Democratic Congress promptly passed a personal income tax.
It kicked in at 1% on incomes above $3,000 (a comfortable upper middle-class income at the time) and reached 7% on incomes over $500,000.
But there were many deductions, bringing the effective tax rates down sharply from the marginal ones—a feature of the tax system ever since.