Last week, 10 Democrats in the Senate joined all 41 Republicans in voting for a $250 billion proposal to cut estate taxes. As Ben Furnas noted at the time, more than 99 percent of this cost (approximately $249.5 billion) would go to the inheritors of estates worth over $7 million.
The proposal was designed by Sen. Blanche Lincoln (D-AR) and Sen. Jon Kyl (R-AZ). Touting the tax cut in a press release, Lincoln claimed that it was “aimed at farms and small businesses.” “With all the money we’ve spent to help the economy improve, very little of it has filtered down to Main Street and family-owned businesses,” the release said.
As the New York Times noted, “the implication is that upon the death of an owner, estate taxes typically devastate small businesses and the jobs they provide. That is swill.” Indeed, according to some new analysis by the Tax Policy Center, Lincoln and Kyl want to spend $250 billion slashing taxes for the heirs of multi-millionaires in order to save just 60 small businesses or farms from the estate tax:
An always charged issue is how the estate tax affects small farms and family-owned businesses. We estimate that under the Obama proposal, 100 family farms and businesses would owe tax…The Lincoln-Kyl proposal would cut the number to 40.
According to the Congressional Budget Office, “almost all such estates are able to pay the tax bill without having to sell business assets.” As the TPC pointed out, “the biggest winners [of the estate tax cut] would be the very wealthy. Estates worth over $20 million would save an average of $3.5 million.”