At current rates, the tax appropriately falls well short of confiscation - one observes that the rich tend to remain rich, notwithstanding the estate tax. But it surely makes a dent in the concentration and inequality of wealth holding. The offered justification of the Bush tax plan is to provide economic stimulus. But no one seriously argues that elimination of the estate tax has anything to do with stimulating the economy. In fact, repeal might have the opposite effect of encouraging the very wealthy to simply sit on their wealth, since there would no longer be any Internal Revenue piper to pay at the end of life.
Critics also argue that the estate tax breaks up family farms and other small businesses.
But thanks to a series of special rules in the tax code providing relief for exactly this group of estates, the solution of complete repeal is unnecessary and would be largely redundant. If Congress does repeal the estate tax, we won't feel the revenue loss right away, because the tax would be phased out over the next decade. Largely because their arcane rules of budgetary accounting permit Congress to pretend that anything that doesn't happen within 10 years doesn't happen at all, for budget purposes. But we'll feel the revenue loss eventually. The loss of vitality in our economy and democratic politics are likely to be evident only over an even longer time horizon.