They didn't; there was no direct [income] taxes (that came with the 16th amendment).
But witholdings are particularly sinister: they are either theft of what is the employer's (if the wage unpaid is still the owners), or presupposes that the fruit of your labor is foremost the government's and then yours, if the wages are really the employee's at that point. In the latter case the government has made itself equal to God, who had the right to the firstfruits under Mosaic law.
I was being sarcastic. The Civil War was about slavery sure as shooting. And although we can complain about paying taxes, slaves we are not. Much as I hate paying taxes and big government there is no way you can compare that with being an African-American in the South in 1861.
I have a quibble with the notion that income taxes came with the 16th Amendment. Income not from rent of property could be taxed before that, just as income from Whiskey was taxed via an excise tax (major cause of the Whiskey Rebellion put down by Washington).
The Supreme Court had previously held that income from wages could be subject to tax without being a direct tax. Further it had held that income from rent of property could not be taxed, that being too close to a direct tax on the property itself.
The 16th amendment was written to correct that supreme court ruling, so that income from renting property could be taxed without being subject to the limitations on direct taxes (being in proportion to population).
I believe withholding taxes were enacted during WW2 to fund the war effort and have never been rescinded. Certain taxes are indeed necessary, for the maintaining of the military for instance or state and local taxes for the police. But as for me, most I feel are unnecessary and do amounted to theft. Actually aside from the military if it were up to me everything that has the words “Department of’’ in front of it should be abolished. The Constitution never said anything about the need for or the legitimacy of, say, The Dept. of Education or Transportation.