Middle Class Opposes. The estate tax, the most progressive component of the federal tax code, applies only to Americans lucky enough to inherit substantial fortunes. In fact, only 0.2 percent of deaths currently result in taxable estates. By taxing inherited wealth, the tax preserves the American tradition of rewarding hard work, not inherited privilege and wealth. Although the legislation does ensure that the estate tax does not disappear completely in 2010 as current law would require, the bill’s increased exemption allowance and lower top tax rate would mean $244 billion in lost revenue over ten years. This significant reduction would benefit only the wealthiest American estates worth millions of dollars at a time when the federal government is struggling to fund benefits for families hit by unemployment and extend health coverage to people who cannot afford the care they need.

If Congress takes no action on the estate tax, current law would reinstate a $1 million exemption and a top tax rate of 60 percent in 2011, both of which are consistent with – or more generous than – historical levels. Although more estates would be subject to the estate tax, 99.9 percent of them would be millionaires and very few would be small businesses and farms. In contrast, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act would adversely affect aspiring middle-class and middle-class Americans by burdening them with more of the cost of public services while allowing additional accumulated wealth to be passed on for generations. Those who work for their money would be forced either to pick up a bigger share of the tax bill or to suffer cuts in services essential to middle-class families and communities.