Congress finally has a chance to have a sober discussion about how to responsibly reform the estate tax.

After a decade of false accusations and innuendo, Wednesday’s hearing at the Senate Finance Committee provides the first opportunity to set the record straight as to who pays the estate tax, how much revenue it generates and why we should retain it.

Advocates of repealing the tax still claim that it puts small farmers out of business — but most of the world now knows this is disingenuous.

Tom Buis, president of the quarter-million-member National Farmers Union, told us, “Family farmers and ranchers are insulted by those who use farmers as the reason for eliminating estate taxes, when the real beneficiaries are the nation’s multimillionaires.”

Estate tax opponents allege that it touches many people and that the cost of compliance is equal to the revenue collected.

But these claims have also been vanquished by congressional researchers and common sense. The indisputable fact is that the estate tax is paid only by multimillionaires and billionaires, the top one-half of 1 percent of the wealthiest households in the U.S.

In the end, estate tax opponents will complain that preventing people from passing on 100 percent of their wealth to their heirs is “just not fair.” But we greatly diverge on this philosophical point. The estate tax — our nation’s only levy on accumulated wealth — is the fairest and most important tax we have.

It puts a brake on the concentration of wealth and power, generates substantial revenue from those most able to pay and encourages billions of dollars in charitable giving each year. The estate tax is not only fair but an essential component of our nation’s economic dynamism.

Without our society’s substantial investments in taxpayer-funded research, technology, education and infrastructure, the wealth of the Forbes 400 richest Americans would not be so robust.

The estate tax is an appropriate mechanism for those with great wealth to pay back the society that created a fertile ground for prosperity.

The movement for complete repeal seems to be going nowhere. For example, the House rejected a permanent repeal last month in a 212-196 vote.

So those who have historically lobbied for estate tax abolition are now introducing proposals to gut the law, for example, by lowering the rate from 45 percent to 35 percent or even 15 percent. This would mean handing out hundreds of billions of dollars in tax breaks to the wealthiest five out of every 1,000 citizens.

Estate tax opponents avoid the question of how much this might cost ordinary taxpayers. And yet it is irresponsible for this debate to occur outside the context of the nation’s growing debt, a burden that we are passing on to the next generation.

Nor can we ignore future financial obligations for health care, energy, national security, education and other pressing investments. Are additional tax cuts for the already wealthy really a priority?

We advocate raising the amount of exempted wealth above the current $2 million per spouse to further reduce the number of estates that pay the tax. By 2009, under existing law, the wealth exemption will rise to $3.5 million on individuals and $7 million for a couple.

But Congress should minimize the future cost of extending the 2009 exemption level — and consider a progressive rate structure to offset lost revenue. In the context of our dire budget situation and the need for “pay-go” rules, congressional leaders should explore how to design a “revenue neutral” estate tax reform.

States were big losers when Congress abolished the “state credit” portion of the estate tax as part of the 2001 tax bill. A responsible reform would reinstate this provision and enable states to once again share in estate tax revenue by piggybacking on the federal law.

Congress must deal with the estate tax before the law sunsets in 2011 and we return to the version that existed in 2001.

Lawmakers have a wonderful opportunity to responsibly reform the law by minimizing the lost revenue and reconnecting states to the federal law. Let’s start with a temperate examination of the facts and costs.