A brief look at the estate tax over the past nine years

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In 2001, the exclusion stood at $675,000, with a top rate of 55%. The Economic Growth and Tax Relief Reconciliation Act dropped the top rate to 50% for 2002, with scheduled decrements of 1% each year until 2007, when it became 45%. It did away with the planned increase in exclusion to $1,000,000 in 2006, instead bumping the exclusion to $1M in 2002 and increasing it at last to $3.5M by 2009, with a top rate of 45%. Due to a sunset provision in the bill, it returns in 2011, absent intervention, to the $1,000,000 exclusion and 55% rate it would have reached in 2006.

The intervention agreed upon by the administration and the GOP would set exclusion at $5,000,000, with a top rate of 35%.

So to sum up, the exclusion will have gone up by a factor of almost ten, and the top rate will have been slashed nearly in half. Does this make sense at all if either party is serious about the deficit?