The Congressional Budget Office (CBO) released a report today called "Effects of the Federal Estate Tax on Farms and Small Businesses." The report, which was prepared at the request of Senate Finance Committee Ranking member Max Baucus (D-MT), looks at how family farms and small businesses are truly affected by the existence of an estate tax. Proponents of estate tax repeal often make the argument that the tax unfairly hurts family farms and small businesses. In reality, a number of exemptions for family farms and small businesses exist, which can serve to significantly lower the number of estate tax filers. This analysis, which uses data from 1999 and 2000, looked at the effects of freezing the estate tax exemption level at $1.5 million, $2 million, and $3.5 million. The report found that any of those expemtion levels, along with a 48 percent tax rate and a large Qualified Family-Owned Business Interest (QFOBI) would substantially reduce the number of small businesses and farmers affected by the tax. The estate tax needs to be reformed so that in 2011 (when it is scheduled to revert to it's pre-2001 form), family farms and small businesses are not unfairly burdened with the tax. However, as this report alludes to, repeal is not necessary in order to reduce the burden on family farms and small businesses. Deductions like QFOBI as well as raising the exemption level to one of the above-mentioned levels can work to do the accomplish the same end.