BILL CHIROLAS: A $1 Trillion Misunderstanding -- Estate Tax Repeal

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William Chirolas -- World News Trust

I was trying to understand the other day how discussion of the estate tax has lead to a vote in the next few days on repealing the estate tax.

Do folks not know that portion of an estate that is exempt from taxation has doubled since 2000 to $2 million ($4 million per couple) in 2006, with the current law stating that it will rise to $3.5 million ($7 million per couple) in 2009? Do folks not know that the above has caused the number of estates being taxed each year to drop 75% compared with what it would have been under pre-2001 law, with the 2009 increase in the exemption level causing that low number to drop about another 50%?

Only five out of every 1,000 people who die this year (and about half that in 2009) will pay any estate tax. It is estimated that only 123 farms, and 135 small businesses, would have paid any estate tax in 2006, and that for 2009 this drops to 100 family businesses and only 65 farm estates (few call these "family farms"), with only 13 farms facing a liquidity constraint because of failure to put aside money in bank accounts, stocks, bonds or insurance, perhaps forcing them to use the allowed spreading of the estate tax payments over a 14-year period in order to avoid a sale of the farm estate.

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