New York Times Budget Puzzle's Description of Estate Taxes

Our journal tends to slant towards the notion of smaller government, and in that spirit, I think the New York Times' Budget Puzzle, wherein we are challenged to fix the federal deficit based on the predicted recommendations from the deficit commission, is a good exercise for any of our would-be readers.

But I took pause while perusing the deficit option when it came to the so-called "death tax."  I am currently immersing myself in a trusts and estates course, and Professor Melanie Leslie has spoken at length at the increasing absurdity of the federal estate tax.  Her textbook has assumed that there would be no way Congress would allow the current situation, wherein 2010 has no estate tax and next year it returns to rates from pre-2001, to continue.

Last year, the first $3.5 million of an estate was exempt from taxation and the remainder taxed at 45%; the Obama Administration recommends returning to this.  Of course, in the current anti-tax climate, the New York Times writes to my amusement in the Budget Puzzle that a plan that would raise the exemption to $5 million with any value above taxed at 35% to be "the most moderate of the estate-tax options here."  I realize fiscal conservatives love the rail against estate taxes, but at this point, it hits less than 1% of the population.  Almost every politically feasible proposal on the table will only diminish that further.

[[UPDATE]]


MediaMatters' Jamison Foser has several criticisms of the Budget Puzzle and notes particularly its discussion of the estate tax:
[T]he Times' project is plagued by the usual reliance on "some say … others argue" reporting that carefully avoids telling readers what is true, or giving them enough information to decide for themselves what is true. Though perhaps that is for the best: When the Times does get around to making judgment calls, the results are questionable. For example, the Times tells readers that the "most moderate" of the estate tax options is the one which taxes large estates the least. That's right: According to the New York Times, a proposal that completely exempts from taxation estates worth $4.9 million is the "most moderate" option. The Times construct suggests that the least moderate approach is to return to the estate-tax policies of the Clinton-era -- when, as you may remember, both the overall economy and the wealthy were doing just fine.