How was the income tax established in the 20th century?

The establishment of the income tax in the 20th century occurred through an amendment to the Constitution, specifically the 16th Amendment, which was ratified in 1913. This amendment allowed Congress to levy a federal income tax without apportioning it among the states based on population, addressing concerns of fairness and equity in tax distribution. Before the 16th Amendment, income taxes were often seen as unconstitutional or were generally limited due to the requirements set by the Constitution, which mandated that direct taxes be apportioned according to the census.

The significance of the amendment paved the way for the modern tax system, enabling the federal government to generate revenue effectively. It is crucial to understand that the choices mentioning congressional legislation, a presidential executive order, or state legislation do not convey the constitutional foundation that allows for federal income taxation, making them less accurate in the context of how federal income tax came into existence in the 20th century.