WASHINGTON — No piece of legislation before the U.S. Congress requires action more urgently than extending the tax cuts of 2001 and 2003. Failure to act will deal a devastating blow to our fragile economy by slowing growth and killing jobs — at the worst possible time.

If the 2001 and 2003 tax rates are allowed to expire at midnight on Dec. 31, we’ll witness the largest single tax hike in U.S. history — hitting American taxpayers with $400 billion in new taxes in the first year and $4.5 trillion over the next decade.

Marginal tax rates, as well as dividends and capital gains taxes, will rise. This will squarely hit taxpayers — ranging from the investors who pour capital into job creation to retirees and workers planning for retirement.

The estate tax will come roaring back to 55 percent, and the exemption threshold will dip from $5 million estates to $1 million — threatening the livelihood of many small businesses and family farms. In addition to the 2001 and 2003 tax rates, relief from the alternative minimum tax will lapse, along with many vital business tax provisions.

President Obama and many from his party say that the 2001 and 2003 tax rates should not be extended for those earning $250,000 or more — the so-called wealthy. But nearly a million successful small and family-owned businesses that file their taxes as pass-through entities will get swept up in the tax hike.

Many of these businesses could see their top tax rates rise from 35 percent to nearly 45 percent. And a heavier tax burden on our nation’s job creators will have a chilling effect on hiring and expansion.

Preventing the historic tax hikes is essential, but it’s not the only economic threat. Lawmakers must also contend with the $1.2 trillion in automatic budget cuts that will be triggered on Jan. 1.

The ill-designed, across-the-board discretionary spending cuts — a result of the failed Deficit Supercommittee — were never intended to take effect. If they do, they will disproportionately cut $500 billion in military spending. What’s worse, they will fail to address the real drivers of runaway spending — massive and growing entitlement programs.

Many economists warn that this dangerous combination of tax hikes and spending cuts, dubbed “the fiscal cliff” in Washington, could drag our economy back into a recession.

According to the nonpartisan Congressional Budget Office, going over the fiscal cliff could cause growth to stall to a feeble 0.5 percent in 2013. A substantial slowing of economic growth will accelerate unemployment.

Some leading economists project job losses between 300,000 and 2.9 million stemming from the tax hikes alone. And if the indiscriminate automatic spending cuts take effect, some sectors will be hit hard with job losses — 1 million defense and manufacturing jobs are expected to be wiped out in just two years.

The Chamber of Commerce urges Congress and the president to take swift action to stabilize the economy, drive growth and create jobs. Our leaders should extend the tax rates of 2001 and 2003 immediately and for all Americans. They should make smart and significant spending cuts — not with a meat ax, but strategically and fairly.

The short-term crisis is avoidable — if lawmakers will act. But it will also take action to prevent a deeper future crisis, driven by an arcane, uncompetitive tax code and a looming entitlement crisis that threatens the very solvency of our nation.

A plan to move forward to address the fiscal cliff could give lawmakers the opportunity to take the necessary first steps toward fundamental reforms. They should seize it. By agreeing to a timetable for meaningful tax and entitlement reforms our leaders can show that they are also serious about our long-term fiscal health.

• Josten is executive vice president for government affairs at the U.S. Chamber of Commerce.