Here's a back of the envelope on incentives:
- Emergency unemployment benefits are ended "prematurely". Keynesians say that end depresses the economy, but it really expands it because it reduces the pay people can receive by not working. In terms of marginal tax rates for middle income people, this provision will lower them about 2.2 percentage points (see Chapter 5 of The Redistibution Recession, this is expressed as a percentage of total compensation).
- "Bush rates" for individual income tax expire: rates rise about 3 percentage points (using the same compensation units as above -- not the usually units you see cited).
- The payroll tax cut expires: raises rates 1.8 percent points (same units as above).
- AMT hits a lot more people. If the Bush tax cuts had not expired, that would probably rate rates about one point. But the cliff expires the Bush rates, so it is possible that adding on the AMT lowers rates. So let's call it zero.
- TOTAL: marginal tax rates for middle income people go up 2.7 points. Their after tax share falls by 0.049 log points (that is, about 5 percent).
The bigger issue for the labor market in the medium term is what happens with the ACA. If that goes in as planned, it should be a lot more depressing than the fiscal cliff (although I am still preparing my estimates here -- not a simple law).