Same thing. People have more money than some people think they should have. And that minimizing dynasties thing really worked well from the Fords, Rockefellers and (ironically enough) the Kennedys forward. Even before the changes, it mainly managed to get the little guys while the dynasties skated.
There are 5.5 million family businesses in the U.S. So even if each and every one of those 4,700 taxable estates were family businesses (and they aren't), only 0.086 percent of all family businesses are affected by the estate tax. That's so small a percentage as to be insignificant.
It's not insignificant to the multi-millionaires who end up paying an average tax of 7%.
This is where the issue gets tough. Part of the history of this objection, the "family business" concern, was regarding family farms. It's not tough to imagine a farm worth quite a bit, yet producing a return that provides a middle class income to the family running it. One can debate whether it makes any sense for someone to keep a $10M piece of land operating as a farm, but resulting in some small return after expenses, but that's the choice many of the owners are making. This situation is the poster child for that "family business" issue.
I mention this, but I agree with you. My wife and I were W2 employees for 30 years, and high savers. When the exemption was sub $1M, we needed to do some planning. But, in the end, why should our savings be treated any differently than the wealth of someone tied up in a business, small, large, farmland, etc?
In the end, it's all of these exceptions that make the tax code so complex. Long term, the estate tax structure should stay as it is, continue to be indexed, and those subject to it should be offered a payment plan regardless of the asset being taxed.
Congress has made payment of taxes for farms and other closely held (family) businesses easier in two ways. First they allow special use valuation. Normally for tax purposes a property is valued as if it could be used for its most productive use. But for farms especially, the land will be valued as a farm and now for how it could be used (e.g. for development), often resulting in a much lower value.
Additionally, payment of estate taxes on farms and closely held businesses can be paid over 14 years. There will be interest, of course, but that interest is pretty reasonable. And principal payments may be skipped for the first four years.
Exceptions are what make all forms of taxes so complex. It's not just for raising money, but also for social engineering. And that's not always a bad thing.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.