Rich dead people need "relief" more than seniors

It's been a rather bizarre decade for what Republicans call the "death tax," but what should more properly be called the inheritance tax. Back when George W. Bush came into office, he slashed the estate tax, and gradually phased it out until 2010, when there was no estate tax. Since then, Congress has set it at a 35 percent rate, with a $5 million exemption, indexed to inflation -- but that's set to expire, along with everything else, in the new year, and revert back to its Clinton-era levels.

Those Clinton-era levels of a 55 percent rate and a $1 million exemption are much, much higher than what's being talked about as part of a fiscal cliff deal. According to Sam Stein and Ryan Grim of the Huffington Post, the latest proposal that really, really might turn into an actual deal would set the estate tax at a 40 percent rate, with a $5 million exemption, indexed to inflation. In other words, the first $5 million of any estate would not be taxed, but the rest would be at a 40 percent rate, with that $5 million exemption growing each year with inflation. And remember, these are exemption levels for singles; the exemption level for surviving spouses is double this.

It's a tax change that doesn't affect many households, but it does affect the budget in a big way...

Remember, the CBO figures switching to chained CPI would reduce deficits by about $200 billion over a decade, with a little less than half coming from tax increases and the rest from Social Security and other benefit cuts. In other words, a lower estate tax costs us almost twice as much as chained CPI would save.