January 1, 2013: “Taxmageddon.”

That’s what The Washington Post dubbed the $494 billion tax hike that is set to take effect when the clock strikes midnight. This would be the highest tax increase in the history of the United States.

According to Strategas Research, at 3.5 percent of gross domestic product, this increase is only 0.1 percent less than all the tax increases from 1968-1982 combined (or 0.2 percent more than all the tax increases from 1980 to 1993).

To put things further in perspective, the tax increases set to take effect are only $8 billion less than all the taxes Obamacare raises over 10 years. No wonder Federal Reserve Chairman Ben Bernanke has stated that we are staring over the edge of a “massive fiscal cliff.”

The list of the different taxes to be raised is three pages long. A third of the tax hikes come from the Bush tax cuts of 2001 and 2003. Besides the marginal rate reductions, these cuts also increased the child tax and adoption credits, and increased breaks for dependent care and education costs. There also was a provision to reduce the marriage penalty. Now, the child credit will be cut in half, brackets will double for the marriage penalty, marginal rates will jump up (and not just for those dastardly millionaires and billionaires), and all the other breaks will expire.

A quarter of the increases come from expiration of the payroll tax cut, with expiration of the alternative minimum tax “patch” accounting for a 25 percent. The rest come from a series of Obamacare tax hikes, the increase of the death tax to 55 percent, and ending of a series of about 50 “tax extenders” usually renewed every year or two.

So, this is what we have staring us in the face at a time when the economy has grown at a tepid 1.7 percent over the last year and the real unemployment rate (including people marginally employed or those who have left the labor force entirely) stands at 14.8 percent.

When you’re a hair’s breadth away from a new recession, the last thing you want hanging over your head is the sword of Damocles.

Congress needs to act, and act quickly, to spare the economy and the American people months of unnecessary uncertainty. It also is in Barack Obama’s (and the Democrats’) interest to take the lead on this issue before the election.

Doing so could do nothing but help economic growth for the second half of the year. The whole reason Obama and the Democrat-controlled Congress extended the Bush tax cuts in 2010 was because they were fearful of raising taxes due to the economy’s lousy performance. Nothing has changed in two years.

Can both parties work together to fix this issue, and more importantly, do they want to?

There shouldn’t be much arm-twisting to be done with the congressional Republicans over tax cuts, especially those elected in the tea party tidal wave of the 2010 midterms.

It’s a different story with the Democrats. Harry Reid’s Senate hasn’t passed a budget in more than 1,000 days and the president has always preferred to “lead from behind” and have others do his dirty work for him.

If Mitt Romney begins pulling away in the polls in the coming months, will the Democrats simply fold their arms and let Taxmageddon become the problem of the incoming Republican administration?

It wouldn’t surprise me to have a petulant narcissist like Obama fiddle while Rome burned, but would leading Democrats back his play, especially after he led them to defeat in November, and when they will owe him nothing?

Time will tell. But without bipartisan action on this issue there will be no economic rebound this year, and 2013 will turn into our annus terribilis, no matter who takes the oath of office on Inauguration Day.