I'm not for raising income tax rates. I'm almost never for raising any taxes. If a government entity really doesn't have enough money, and they can't raise enough money with bake sales to build their bombs, roads, sewers, or schools, then maybe, but that instance is so rare that it's not really worth discussing.
Besides that, letting the Bush tax cuts expire is counterproductive. Raising taxes on just the rich from 35% to 39.6% would increase revenue little, if any. The wealthy have the most elastic wages of all income groups. If you raise taxes on someone living paycheck-to-paycheck, you can get more revenue, because not only will they have to pay the taxes, they will have to work more to make up the lost income. The wealthy are much more likely to be in a position to choose whether or to absorb the hit, increase their income (through working more or whatever) to make up for it, or reduce their income due to the reduced incentive. A 4.6% tax increase wouldn't reduce incentives for very many wealthy people, but the marginal ones might make a difference in this recession.
All that being said, the Republicans in Congress should let Bush tax cuts expire. Basically, the agreement has been to extend the Bush tax cuts by two years, spend a lot of Federal dollars on stimulus measures that the President has wanted for some time, and add enough pork to buy off enough Democratic Congresscritters to get it passed. This isn't a good deal. Republican voters should demand more. Sure, taxes will go up January 1, but if the newly-elected Republican House gets on it and passes a better tax bill immediately, workers might only see the taxes for one paycheck. If only there were a ready-made tax plan that reduced rates for almost everyone, would have a stimulative effect on the economy, and reduced the deficit...
... Oh yeah, the plan from the President's Debt Commission. In a rare fit of sanity, the White House appointed a debt commission that ended up recommending a flatter income tax system with tax brackets of 9%, 15%, and 24%, and a corporate income tax rate reduced from an insane 35% to a still uncompetitive, but less onerous 24%. It'll increase revenue by including capital gains as income, and significantly reducing the number of deductions, but almost every taxpayer will end up taking home more. Also, it would greatly simplify tax returns. What's not to like? It has the backing of a bipartisan group from Tom Coburn to Dick Durbin, and the President even supports it. (My guess is only because he commissioned it, but I don't know.) House Republicans should be able to pass it as a package with an up-or-down vote, with no pork, and while the Senate may need to buy off some votes with pork, it won't be the crapfest that the Bush tax cut extension has become. Let's see if Republicans have learned their lesson.