The agony of Form 1040 was a new experience for millions of Americans during World War II. Well-heeled citizens had paid income tax since the passage of the 16th Amendment in 1913 but the average worker was exempt.
Then in 1940, the government extended the income tax to virtually all Americans. The number of taxpayers increased 10 fold – from four million in 1939 to 43 million by 1945.
By the end of the war the nature of the income tax had been fundamentally altered. Reductions in exemption levels meant that taxpayers with taxable incomes of only $500 faced a bottom tax rate of 23 percent, while taxpayers with incomes over $1 million faced a top rate of 94 percent. These tax changes increased federal receipts from $8.7 billion in 1941 to $45.2 billion in 1945.