They argue that family farms and businesses account for a tiny proportion of those who will benefit, and that current law contains special tax breaks for them anyway. That's just 2,400 families, the heirs of the wealthiest one in 1,000 Americans who died that year, the Center on Budget and Policy Priorities found. Critics also say charities will lose out, since wealthy taxpayers will no longer have any tax incentive to give away their money when they die. The table shows a breakdown of estates that were subject to federal estate tax in 1997. The effective rate is the taxes paid as a percentage of the value of the estates.
Supporters say the federal budget can stand to lose the revenue because of the burgeoning surplus.
Abolishing the gift tax would allow investors to avoid paying capital gains taxes by giving their gains to relatives who are likely to die before them, for instance. Supporters say any legislation that is passed will contain provisions closing such loopholes. The Web Copyright 2001 ABC News Internet Ventures.