According to the Congressional Budget Office, the projected skyrocket in tax rates beginning January 2013 with the expiration of the Bush tax rates will cripple the economy, jacking unemployment rates up to a full 9.1% for the year. GDP would plummet 0.5% -- a double-dip recession. If, by contrast, taxes are not raised, annual growth will be some 2.25% according to the CBO.
In any case, economic growth and fiscal responsibility go hand-in-hand; should the economy shrink, increasing tax rates will not make up for the lost tax revenue in a growing economy. That’s why economists largely favor spending cuts rather than massive tax hikes. It’s also why Barack Obama said in 2009, “Normally you don't raise taxes in a recession. Which is why we haven’t. And why we've instead cut taxes.”
We may not technically be in a recession any longer. But economic policies can plunge us back into one. And that’s precisely what President Obama and his Democratic cohorts want to do.