Legislation proposed by Sen. Kent Conrad (D-N.D.), and Thad Cochran (R-Miss.) last week would reform the estate tax instead of repealing it as President Bush has suggested. However, in the “Estate Tax Reform Act of 2001” owners of family farms and small businesses would receive special consideration.

The plan calls for an increase in the estate tax exemption in 2002 on earnings of $1 million for individuals, $2 million for couples, $1.5 million for family farms and small businesses, and $3 million for couples owning family farms or small businesses. Under current law, estate taxes kick in after individual earnings reach $675,000 and $1.35 million for couples.

By 2006, the bill calls for the exemption to rise to $4 million for family farms and small businesses, and $8 million for couples owning family farms and small businesses.

If enacted in 2002, 40 percent of the estates expected to pay tax would become exempt.