I don't know the origin of it, but I think the basic idea is a misunderstanding of marginal tax rates. The way that tax brackets work is that every dollar you make over the bracket start is taxed at that rate, but some people misunderstand this as all income being taxed at that rate.

So, for example, let's pretend there are two tax brackets, one for all income up to $50,000 (at a 20% rate) and one for everything after that at a 30% rate. So some people think that if you make $50,000, working overtime and earning $1 will bump your tax bill from $10,000 to $15,000.30, which it doesn't, it goes from $10,000 to $10,000.30.

So if you're near the top of a tax bracket and don't understand how brackets actually work, you can see why you'd think this.

There actually is a small disincentive to work caused by marginal rates, since as you make more money you keep less of it. (In my example above if you make $25/hr, then every hour you work up until hour #2000 makes you $20, whereas every hour after #2000 makes you only $17.50. So there's less incentive to work after hour #2000 because you're making less money per hour.) The size of this effect is disputed, though, with some researchers claiming it's quite large and others claiming it's virtually non-existent.

I hope this helps, and hope it's enough for a top-level comment here despite containing no history whatsoever.

(In case anyone wants a citation for this being a common misunderstanding, you see it quite a bit, including this question I was able to quickly google: http://www.bargaineering.com/articles/slight-misunderstanding-of-marginal-tax-brackets.html)