ESTATES OF PAIN

[HT:JH]
President-elect Obama and Congressional leaders intend to maintain the estate tax rather than let it expire on schedule in 2010. They will do so even though their economic stimulus plan is supposed to be about creating millions of new jobs in a hurry.

According to a 2006 Joint Economic Committee (JEC) study, the death tax has reduced the stock of capital in the economy by about $847 billion. If it were abolished, the economy would create roughly 1.3 million more small business jobs.

So the estate tax strikes most heavily at small- and medium-sized family-owned businesses that generate the majority of new American jobs. Thus, hitting these family businesses with a multimillion dollar tax bill when the owner dies won't help job creation.

But Republicans alone won't have much chance to stop this plan, so its fate will hang on Senate Democrats.

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