Anti-tax ideologue Grover Norquist of Americans for Tax Reform (ATR) and his allies in Congress are calling for repeal of the estate tax. However, as lawmakers look to address our nation’s long-term fiscal dilemma, they should consider the estate tax a key piece of the puzzle and should include a stronger version of the tax in any deal to raise the debt limit.

When President Obama reached a compromise with congressional Republicans in December 2010 over extension of the Bush tax cuts and long-term unemployment insurance, the agreement included a little-known deal on extension of the estate tax. Though there was no estate tax in 2010 due to the Bush tax cuts of 2001 and 2003, the tax would have returned in 2011 at pre-2001 levels without congressional action.

The tax policy compromise required only those individuals with multimillion-dollar estates to pay a 35 percent tax on assets worth over $5 million ($10 million for a couple) passed on to heirs. In 2009, the exemption level was already a generous $3.5 million with a 45 percent rate. In 2001, the estate tax had a future requirement that heirs pay a 55 percent tax on any assets above a $1 million exemption level. Other actions taken by Congress on rules for certain retirement account exemptions and generation-skipping transfer taxes will allow even more tax-free estate transfers.

In a May policy paper, the Center on Budget and Policy Priorities (CBPP) argued that the 2009 estate tax levels were already quite munificent and advocated for the current levels to expire at the end of 2012, which coincides with the expiration date of the Bush tax cut compromise. Using estimates from the Urban-Brookings Tax Policy Center, CBPP showed that had Congress reinstated the 2009 estate tax levels for 2011, "only 6,460 estates nationwide – one-quarter of 1 percent of estates – would have owed any estate tax" in 2011. "Thus, 99.75 percent of estates will not benefit from the more generous exemption level and lower rate instated under the tax-cut compromise."

With discussions underway between the White House and Congress over instituting some form of a long-term deficit reduction plan through agreement to raise the nation’s borrowing limit, lawmakers have the opportunity to correct this unjust giveaway to the rich and demand a stronger estate tax. Most rumors about the contents of negotiations to raise the debt limit center around roughly $1 trillion in spending cuts over the next ten years while raising approximately $200 billion to $300 billion in additional revenue.

Those spending cuts will hurt programs like Medicaid that helps provide healthcare to the poor, the Securities and Exchange Commission (SEC) that oversees Wall Street, and Women, Infants, and Children (WIC) that provides nutrition to needy mothers, newborns, and children up to age five. If the deal included going back to 2001 estate tax levels, lawmakers could bring in an additional $68 billion over the next ten years, according to the Joint Committee on Taxation, and lessen the need to cut important federal programs.

Sen. Bernie Sanders (I-VT) made a similar argument recently in a letter to the White House, urging President Obama "not to yield to Republican demands to shield the wealthiest Americans and the most profitable corporations from responsibility for lowering deficits and reducing the national debt." Even the administration seems to be moving in this direction, as one staff member remarked to the Washington Post that their efforts are "focused on millionaires and billionaires." The estate tax fits that description perfectly.

As economic inequality rises and concentrations of wealth in this nation become more unbalanced, requiring multimillionaires to sacrifice alongside middle- and lower-income families is not only the fair approach to long-term deficit reduction, it is one of the only reasonable options left. Moreover, the public has shown that, if given a choice, they prefer to require high-income earners to help us out of our economic straits. Neither the president nor the vast majority of the Democratic Party were willing to argue for allowing a strong estate tax to come back to pre-Bush tax cut levels late in 2010, but they have the opportunity to do so now. They should do just that.