Our guest blogger is Seth Hanlon, Director of Fiscal Reform for the Center for American Progress Action Fund’s Doing What Works project.

One of the enduring myths of American politics is that the estate tax falls hardest on small businesses and family farms, forcing them to sell their farms and businesses to pay the tax. It’s not true, and has never been true. Nonetheless, newspaper reporters have scoured the land for many years, searching in vain for families forced to sell small businesses or family farms due to the estate tax.

Now that Congress seems poised to eviscerate the estate tax, the task of finding these mythical estate tax victims is going to be even harder. The tax cut compromise moving through Congress would exempt all estates with assets valued at under $5 million and $10 million for couples. With the exemption raised to these levels, only the largest 3,600 estates in the country will pay any estate tax; the other 99.86 percent of estates will be entirely exempt.

Yet it appears that no matter how much Congress slashes the estate tax, the Wall Street Journal will continue to send its reporters in search of the “small businesses” that are going to be devastated by the tax. A Journal story today carries the headline, “For Family-Run Small Businesses, Estate-Tax Uncertainty Adds Cost.”

Has the Journal actually found a small business that will suffer under the weight of the estate tax? Not quite. The story profiles a wealthy Arkansas man who owns a lumber business, forest land, and five mills that are currently valued “between $30 million and $50 million apiece.” This is the Journal’s only example of the “small businesses” faced with uncertainty under the new estate tax regime.

Does a business with 600 employees that is worth more than $150 million fit within the definition of “small business”? Only if you’re the Wall Street Journal publishing a story about who pays the estate tax, and you need a sympathy-inducing headline.

Estimates by the Tax Policy Center show that only fifty small farm and business owners in the entire country will pay any estate tax next year under the new framework, and they would pay an average rate of just 7.4 percent. If they actually exist, these fifty farms and businesses can probably avoid the tax altogether with only a little bit of estate planning — and so can many estates well in excess of $5 million.

According to the Journal, the $5 million exemption “won’t apply” to the lumber mill owner “because the value of the mills is so high.” Actually, the $5 million or $10 million exemption applies to all estates, and only the value above that level will be taxed.

With the tax legislation nearing passage in Congress, the estate tax is all but dead. It appears, however, that on the pages of the Wall Street Journal the small business myth is as alive as ever.

Rep. Michele Bachmann (R-MN) made a bold attempt to redefine the word “deficit” last week during an interview on CNN, telling a perplexed John King that unpaid for tax cuts shouldn’t count as increasing the deficit. “I don’t think letting people keep their own money should be considered a deficit,” she said.

It’s easy to dismiss Bachmann’s bizarre pronouncement as just another in the long list of crazy things she’s said. But CNN was host to another attempt at deficit redefinition this morning, courtesy of Rep. Mike Pence (R-IN). When asked to square his fearmongering about the cost of the tax package before the House today with his desire to permanently extend all of the Bush tax cuts (at a cost of almost $4 trillion), Pence replied that tax cuts only contribute to the deficit in the minds of “Washington number crunchers”:

Q: How can you say the American people didn’t vote for deficits, when at the same time your plan would add almost $3 trillion to the deficit?

PENCE: Yeah, I’ve heard that analysis for years. I know in Washington D.C., they tend, the budget, the numbers-crunchers here tend to think that when they don’t take money from the American people there’s a cost that they ought to round…With a growing economy, I think those predictions are wrong. I think as the economy expands, even revenues to the federal government will expand.

Watch it:

Pence, it seems, believes wholeheartedly in the tax fairy: the notion that tax cuts cause revenue to increase, all actual evidence to the contrary. No serious economist, left or right, subscribes to this notion, and we have ample evidence showing that the Bush tax cuts definitely did not cause a boost in revenue (either in real dollars or revenue as a percentage of GDP).

But House Republicans are so in thrall with the misguided idea that tax cuts do not add to the deficit that they are making it part of their official House-governing rules for next year. As Congressional Quarterly noted today, House Republicans are putting the finishing touches on a new rule called “cut-go,” which requires that new spending programs — but not new tax cuts — be offset with spending cuts:

The budgetary mechanism, which Republicans refer to as a “cut-go” rule, will mandate that lawmakers pay for any new spending program by eliminating an existing program of equal or greater value. It is similar to the pay-as-you-go rule previously introduced by House Democrats except that it does not allow spending increases to be offset with new taxes or fees. Also, tax cuts would not have to be offset with spending reductions.

Pence, of course, would dismiss this as the silly ruminations of number-crunchers, but the Center on Budget and Policy Priorities found that the Bush tax cuts are one of the biggest drivers of the long-term deficit, causing $3.4 trillion in deficits over between 2009 and 2019 alone.