State of the estate tax debate

From 'Extend the estate tax,' in today's Washington Post

In one of those fiscal time bombs left from the Bush administration, the estate tax, having gradually dwindled, is set to be eliminated entirely next year - only to spring back to life, full-force, in 2011. Unless something is done, 2010 will be the year to throw Mama from the train, tax-free. This would be terrible policy, not to mention unkind to Mama. The least bad, hold-your-nose alternative would be to set the tax permanently at its 2009 level, exempting the first $3.5 million of any individual estate - $7 million for a married couple - from taxation. At this level, 99.8 percent of estates are not subject to the tax. Claims of 'death tax' foes notwithstanding, a tax at the 2009 level would have scant impact on family farms or family-owned businesses. In 2011, according to estimates from the Urban Institute-Brookings Institution Tax Policy Center, only 100 such entities would have to pay any estate tax, and virtually none would have to be liquidated to pay the tax. Nonetheless, the estate tax would continue to bring in badly needed revenue even at this level: $206 billion over the next 10 years. This is the hold-your-nose solution because it is excessively generous to the wealthiest Americans at a time of fiscal emergency. Making the 2009 level permanent would drain nearly $400 billion from the federal treasury from 2012 to 2021 compared with letting the estate tax revert to the rules in effect in 2001, when the tax was set at 55 percent with a $1 million exemption per person. In a perfect world, which is to say not the 111th Congress, the tax would be set somewhere between the 2001 and 2009 levels.