Bayh, who is retiring this year, doesn't think most of his Democratic colleagues will share his view on taxes but said at least one "unnamed liberal senator" said taxes shouldn't be raised on anyone making less than $1 million a year.
"It's the people in the upper brackets who continue to spend at a higher rate propping up consumer demand," he said.
Those Americans in the upper-income tax brackets are the "ones who make the decisions about hiring and about making investments," he said. "We want them to do more of that, and so raising burdens on them during a time like this is just not the right thing to do."
Bayh suggested the job market will need to create about 200,000 jobs a month before the economic recovery can be considered "self-sustaining."
Once that begins to happen "then we can pivot and look at deficit reduction, in the long run."