Interesting estate tax stuff that accumulated while I was away:

• New York Times (David Cay Johnston), Few Wealthy Farmers Owe Estate Taxes, Report Says (7/10):

The number of farms on which estate tax is owed when the owners die has fallen by 82% since 2000, to just 300 farms, as Congress has more than doubled the threshold at which the tax applies, the Congressional Budget Office said in a report released last week. All but 27 farmers left enough liquid assets to pay taxes owed, the budget office found, although it hinted that the actual number might be zero.

• Congressional Budget Office, Effects of the Federal Estate Tax on Farms and Small Businesses:

Critics of the federal estate tax argue that it can hinder families who wish to pass on a farm or small business, because heirs must sometimes liquidate the farm or business to pay the tax. This CBO paper—prepared at the request of the Ranking Democratic Member of the Senate Finance Committee—examines the effects of the estate tax on small businesses and family farms, focusing on how it might alter the behavior of farmers and small-business owners during their lives and on the extent to which their estates have enough liquid assets to pay the estate taxes owed. The paper also looks at the impact on those groups of setting the amount of assets exempt from the estate tax at $1.5 million, $2 million, or $3.5 million. In keeping with CBO’s mandate to provide objective analysis, this paper makes no recommendations.

• Analysis of the NY Times article and CBO report:
  • Death and Taxes Blog
  • Center on Budget and Policy Priorities

• Wall Street Journal, Till Death Do Us Part (7/8):

Karl Marx must be rolling in his grave, and don’t even ask about V. I. Lenin: Russia eliminated its inheritance tax last month. Its move comes after January’s decision by the government of Sweden, the birthplace of the modern-day welfare state, to eliminate its estate tax. Like the Russians, the Swedes have come to believe that the tax is unjust and economically counterproductive. Russia and Sweden join Argentina, Australia, Canada, India, Mexico and Switzerland as nations that don’t make death a taxable event.

The U.S. now has the distinction of imposing the most onerous death tax in the industrialized world. The federal estate-tax rate is 45% on every dollar above a $1.5 million exemption, but in many states the combined federal/state tax on dying rises above 50%. This means that the government can snatch a larger share of the business, home and savings that a citizen builds up over a lifetime than would go to his heirs. If this sounds, well, a bit communistic, it is. The third policy plank of Marx’s "Communist Manifesto" is "taxation of all inheritance."

In Russia, President Vladimir Putin pushed the death tax-repeal bill through the lower chamber of Parliament by a vote of 414-2. Here at home, Mr. Bush is straining mightily to round up just eight of 44 Democratic Senators to permanently liberate America from this confiscatory tax when repeal comes up for a vote later this month. Let’s hope they can muster at least as much faith in capitalist incentives as Europe’s former Marxists.

• Washington Post,  No Need for States To Fear Estate Taxes (7/3):

Here’s some news: A couple of economists from top colleges have found that rich old people tend to move out of states with high estate taxes and into states with low or no estate taxes. But wait. Before you say, "Well, duh, more economists proving the blindingly obvious," and before you wave their study at your local elected officials, be warned — the study provides much less comfort to tax cutters than you might expect.