Sixteenth Amendment to the Constitution was adopted in 1913. Congress could implement an income tax. Prior to the Sixteenth Amendment, people paid indirect taxes through buying items that were taxed. Older children could view an interesting timeline at: Sixteenth Amendment.
United States levied the first income tax in 1862. Any income over $800 was taxed at 3 percent. Idea: Children could translate $800 back then into today’s dollars. They could learn more about the history of the United States income tax at: http://www.infoplease.com/ipa/A0005921.html.