The estate tax has a net positive effect on the economy:

So does the estate tax, as it is currently formulated, constrain economic growth? If it does, the impact is probably very minimal and could be minimized with an exception that applies to small businesses. But in other ways, the existence of an estate tax likely does more to encourage economic growth than it does to discourage it. While there may be some decent moral arguments for eliminating the estate tax, but the economic arguments don’t hold up.

via Does Taxing Inheritance Harm Growth? – Daniel Indiviglio – Business – The Atlantic.

Also, it only affects estates of the deceased that exceed 5 million dollars in worth. Yes, just 2% of Americans.

We shouldn’t let facts get in the way.

Consider the trends: The effective federal tax rate of the wealthiest 400 Americans dropped from 29 percent to less than 17 percent over the past 15 years. Americans have one of the lowest rates of taxation in more than half a century. And according to the Bureau of Economic Analysis, federal, state, and local income taxes consumed 9.2 percent of all personal income in 2009, the lowest rate since 1950.

The gap between the wealthiest and the rest of us has grown wider as that tax burden has declined. The United States at the same time needs federal investments in health care, energy, education, and defense.

Plain and simple: Estate Tax Holiday has helped to increase the deficit.