Sens. John Kyl, R-Ariz., and Blanche Lincoln, D-Ark., are set to introduce a controversial amendment to the Senate budget resolution that would cut estate taxes for the wealthy and could cost the government an additional $250 billion between 2012 and 2021.
Proponents of that Kyl-Lincoln proposal -- which would raise the estate tax exemption from $7 million per couple to $10 million and reduce the rate from 45 to 35 percent -- claim that the amendment is in the best interests of small businesses and farm owners. But two liberal-leaning think tanks, the Center for Budget and Policy Alternatives and the Tax Policy Center have numbers that seriously undercut that argument.
The changes to the estate tax that were passed under former President Bush included a gradual phase-out of the tax, with a completely untaxed year in 2010. President Obama wants to eliminate that untaxed year, and keep the tax at this year's levels, under which 997 out of 1,000 people have absolutely no taxes levied on their estates. What’s more, Tax Policy Center research found that only 5 of every 100,000 taxable estates consist primarily of small businesses and farms. It goes without saying, then, that Lincoln and Kyl's amendement will benefit a tiny portion of the country.