One of the arguments you hear from those who want to extend all of the Bush-era tax cuts is some variation of the quote that Rep. Collin Peterson (D-Minn.) gave the Hill this week: "We shouldn't be raising taxes right now, with the economy where it is."
Ignore for a moment the fact that Congress has raised taxes in the aftermath of recessions before without disastrous results -- witness the large tax increases in 1993. People can argue all day long about what would happen if the Clinton rates were re-imposed today, and they'd generate a lot of heat without giving off much light.
Instead, consider this: On Jan. 1, Congress will almost certainly increase the taxes paid by every job-holder in America. That's because it is set to allow the expiration of a payroll tax holiday that's been in effect for two years. The rates paid by employees will rise from 4.2% to 6.2% on the first $110,000 earned. That increase, which will be felt in the first paycheck, will drain up to $2,200 from a worker's pay next year.
OK, so that's not as big an increase as the one President Obama and most Democrats are seeking in the two highest marginal tax rates. But significantly, it falls on the first dollars earned, not the ones earned after the first $200,000 to $250,000 in adjusted gross income.