There is an interesting thread here (including my detailed post outlining some of the history on this issue) on whether inheritance should even be allowed (http

There is an interesting thread here (including my detailed post outlining some of the history on this issue) on whether inheritance should even be allowed (http://news.ycombinator.com/item?id=1009053 http://news.ycombinator.com/item?id=1009053). You may find the relevant figures for the estate tax in 2001 here (http://gift-estate.com/article/tax2001.html http://gift-estate.com/article/tax2001.html). At that time, the exemption was $675,000 and everything beyond that basically got taxed at significant rates, obviously affecting a lot of middle class people. If the tax is allowed to revert to the old rates in 2011, there will likewise be a significant impact on middle class people. That is why the politicians are squirming and why the exemption amount will likely be increased for 2011 and beyond to something that excludes many such people from the impact of the tax. By the way, I have worked as a business lawyer with family businesses since 1984 and am pretty familiar with their concerns in this area (for example, in almost desperately trying to use vehicles such as family limited partnerships as a way of trying to avoid or minimize this tax and thereby preserve their businesses for their kids on death). Those concerns are real and they do not apply simply to the ultra-rich (who, by the way, have ample mechanisms available to them - e.g., foundations - to bypass the estate tax altogether).