There were income taxes before 1913.

e.g. https://en.wikipedia.org/wiki/Revenue_Act_of_1861

He means permanent. In times of urgent need, such as in times of war, the government would raise money as necessary. The federal government assessing a permanent tax on people was a huge deal and required a constitutional amendment, the 16th, passed in 1913. The act you're referencing was in response to the Civil War (which started in 1861), and would be allowed to ultimately expire about a decade later.

The Civil War was a fight over the efficiency and ability of the country to run itself via taxes or not?

My point is that regardless of the tax regime, America pretty clearly did not run "just fine" in that era.

It seems that you could also say it didn't run fine if there were an invasion, for much the same reasons, but that wouldn't, in most cases, make it a valid critique of the way things were being run, especially with regard to the actual subject here, which regards the tax regime.