There may be no provision in tax law more bizarre than the estate tax. In just a year and a few days, on Jan. 1, 2010, the levy will expire and estates of any size will be passed on tax-free. A year after that, the tax will return with a vengeance. Uncle Sam will take 55 percent of assets of more than $1 million.

Imagine your Aunt Sue had the good fortune to miss out on that tea with Bernie Madoff and has $5 million. If Sue dies within the next couple of weeks, her estate will owe about $1.35 million in taxes (it would pay a 45 percent rate after exempting the first $2 million). However, if she hangs on though midnight of New Year’s Eve, the exemption will rise to $3.5 million and her estate tax will shrink to just $675,000. (Btw, these are rough estimates. There are special breaks for farmers and small businesses, gift tax rules, and many other deductions).

Now, fast forward a year. Sue still has her $5 million (those laddered T-bills were a pretty good idea after all). If she dies a year from today, her estate will still owe $675,000. If she lives for just a few more days, to Jan.1, 2010, it will pay nothing.

Here is where the story becomes truly grisly. If Sue dies at 11:59 PM on Dec. 31, 2010, her $5 million will pass to her heirs tax-free. If, however, she dies 2 minutes later, her estate will owe $2.045 million in tax because the law will revert to an exemption of just $1 million and a top rate of 55 percent. Estates are also subject to new capital gains rules for 2010 only. Now you know why it is called the “throw momma from the train” tax.

A tax that goes from $1.35 million to $675,000 to zero to more than $2 million in the course of 24 months is, of course, nuts.

Equally strange is all the attention this levy gets. In October, TPC estimated that only 15,500 people who die this year will owe any estate tax at all. Of the $23 billion that TPC projected will be generated by the tax in 2008, nearly half will be paid by just a few hundred of the nation’s wealthiest decedents. Since the markets cratered, both the number of taxable estates and the amount they owe will probably be even smaller.

While few are taxed, the revenue produced by the levy is far from trivial—about $500 billion over the next decade under today’s now-you-see-it-now-you-don’t law. In the campaign, Barack Obama promised to freeze the tax at 2009 levels—a plan that would generate about $300 billion through 2018—$200 billion less than current law. The $3.5 million exemption ($7 million for a couple that does minimal tax planning) has strong support in Congress. But look for a huge fight over the rate.

While Obama wants to retain most of the 2001 and 2003 Bush tax cuts, this is one provision he’d do well to change—and soon. Besides, raising the tax might encourage some of the uber-rich to reduce their estates by spending more or giving their dough to charity. And wouldn’t that be a good thing right now?