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July 12, 2005
CBO Estate Tax Report is Bunk
The Congressional Budget Office released a report last Thursday that purportedly shows the effects of the estate tax on family-owned farms and businesses. The report, requested by the Ranking Member on the Finance Committee Senator Max Baucus, also looked at the impact of small increases in the exemption levels.
According to the report, "only" ~1,500 small businesses filed estate taxes in 1999 and 2000.
Do expect this to be widely reported in the press as proof that estate tax repeal is not a small business issue. Do not expect it to be widely reported in the press that the CBO only counted as small businesses affected by the estate tax those who filed a QFOBI deduction.
Yes, the same QFOBI that is considered so onerous to calculate that most CPAs won’t touch it. Aside from undercounting small businesses, the report also totally failed to take into account the cost of estate planning undertaken solely to avoid estate tax penalties.
But perhaps this quote from page three of the report says it best
The variety of definitions and forms of small business that exist precludes a comprehensive examination of the effect of the estate tax on small business.
Thanks for nothing CBO.
Posted by at July 12, 2005 10:39 AM