Estate Tax Issues

In response to the NY Times article titled Estate Tax Will Return Next Year, but Few Will Pay It, I’d like to say this:

The reduction in the estate tax to its lowest rate since 1931 is outrageous. The estate tax has no real effect on jobs- most of the value in estates is from stocks. So the recession is not relevant to estate tax policy.

What is relevant for estate tax policy is that the wealthiest 0.25% will now be able to pass up to $10 million tax free to their heirs. Less of their money will be paid as taxes, further increasing the deficit and the likelihood that middle class people in coming years will pay higher taxes and/or see public programs they count on cut.

This new estate tax means that estates will pay a lower effective tax rate than wage earners. How is that fair by any standard? Shouldn’t estates pay the same effective rate as lottery winners, which have no exemption?

I hope President Obama fights hard for a stronger estate tax.