The War Revenue Act of 1917 is enacted to fund the US participation in World War I. It dramatically increased federal income tax rates and significantly expanded the number of Americans paying income tax by lowering tax exemptions and increasing tax rates.
The act also introduced a wartime excess-profits tax on corporations, raising their tax rates from 1% to 12%. Overall, the act increased the federal tax revenue tenfold and marked a fundamental shift by making income the primary source of federal revenue replacing tariffs and excise taxes; expanding government power and foreshadowing the modern tax system. More
