"The estate tax affects a surprisingly small number of people. In 2003, the most recent year with numbers available, just 1.25 percent of all deaths resulted in taxable estates, with most of them paying relatively little. But 505 estates, each worth more than $20 million, paid $5.2 billion, a quarter of the money raised by the estate tax - and just 17 percent of the value of the estates.
"An odd element of estate tax repeal is that while it will have great benefit for the superrich, it will hurt some of the merely rich, who may have to pay capital gains taxes when they sell inherited stocks and homes.
"Repeal will have no impact at all on the vast majority of people, but you wouldn't know that if you lived in a state with a wavering senator. There, advertising campaigns claim that small-business owners and family farms suffer from the estate tax. In fact, there are provisions in the law to ease the effect on both groups and an estate has to be large to face any tax at all. As a result of the 2001 tax act, which gradually phased out the estate tax, estates of those who die in 2005 will not be taxed on the first $1.5 million of assets, a figure that rises to $2 million next year and to $3.5 million in 2009.
"Under current law, the estates of the wealthy who die in 2010 will not have to pay any tax at all. But in 2011, the estate tax will come back, a provision that was needed four years ago to make numbers add up. If Congress does not act first, one can imagine children of very wealthy people suggesting, as 2010 nears an end, that their parents consider the advantage of dying soon. Paging Dr. Kevorkian."
One dividend, literally, of the Katrina disaster may be that congressional and presidential enthusiasm for keeping the super rich rich may wane in light of the hefty bill for rebuilding the Big Easy and aiding the multitudes afflicted by the storm.