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Notes -
Your dates don't really line up though. Withholding isn't until 1943. You see higher income taxes earlier, after Roosevelt becomes president. You then see an even steeper rise in taxes in general as the USA becomes more and more involved in the war. Finally in 1943 you see withholding implemented, but this is after a decade of higher and higher taxes spurred on by the depression and war. After WW2 you see lower, but still high income taxes and finally income taxes come down after the neo-liberal revolution in the 80s. Withholding doesn't seem important in this picture.
The story I heard was Milton Friedman came up with withholding...hated the idea of it as a more small government person, but thought it was the best way to get enough money to win WWII.
No idea how true that is.
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