When the founder and owner of a small business dies, estate taxes can just about bankrupt the heirs, tax specialists say. Moreover, estate taxes are tremendously complicated and costly, in terms of legal fees, to try to avoid. And they don't bring in that much revenue to the government.

In the opinion of many small business owners, they should be reformed or abandoned.

• The effective rates for inheritance taxes on a business can run as high as a confiscatory 75 percent to 78 percent -- often meaning that the only way to pay the bill is to sell the company.

• Legal bills for large, complicated estates can run beyond $1 million, and it can cost as much to plan for a $4 million estate as for a $400 million estate.

• Estate taxes bring into the federal treasury no more than $15 billion a year -- about 1 percent of total revenue.

• Economists say that cutting the tax would mean fewer companies being liquidated, fewer workers losing their jobs, less time and money spent on avoiding the tax and more on making firms grow.

While there is at least one break -- estates smaller than $600,000 are exempted from the tax -- specialists note than inflation has eroded the exemption, passed in 1981. They say it should now be an inflation-adjusted $820,000.

Source: Jeff A. Taylor, "Planning for Death and Taxes," Investor's Business Daily, January 29, 1997.