Gov. Cuomo is proposing the most significant reform and reduction of New York’s estate tax in 17 years. This is a big reason why public employee unions and their allied advocacy groups are now claiming that Cuomo’s tax agenda favors “millionaires and billionaires.”

In fact, the governor’s estate tax proposal will serve largely to remove a shadow from the legacies of hundreds of thousands of middle-class households, small-business owners and farmers. It also will greatly reduce an enormous incentive for the wealthiest New Yorkers to “move to die,” as the governor has put it.

New York is one of only 14 states still imposing any tax on estates — the cash, real estate, stocks, bonds and other property left by residents who have died. Other states have allowed their death taxes to disappear since 2004, when the federal government eliminated a tax credit that used to absorb the cost of these state levies.

The federal estate tax — also called the death tax — now applies only to assets exceeding $5.34 million, or up to double that amount for a married couple. The excluded amount rises every year with inflation.

New York, however, still taxes estates with gross values starting at a fixed level of $1 million, with no added break for spouses. For an estate just below the federal threshold, the added cost of dying in New York is a cool $431,600.

How many New Yorkers are in a position to leave estates big enough for Albany to tax?

The answer is by no means limited to the much-vilified “1 percent.”

As of 2013, New York was home to 429,153 households with “investable assets” of $1 million or more, according to a report by Phoenix Marketing International, a private research firm. That’s nearly 6% of all households in the state, and more than 10 times the number of New York tax filers reporting annual incomes of $1 million of more.

And because it doesn’t include land and home values, even this figure underestimates the true number of millionaire households in New York. Untold thousands of otherwise middle-class New Yorkers — including Mayor de Blasio — now own homes and apartments whose value has risen above $1 million or more in recent years.

Skyrocketing real estate prices haven’t been confined to gentrifying urban neighborhoods. The average price of agricultural land in New York has nearly doubled since 2000, increasing from $1,430 to $2,600 per acre. As of 2007, there were more than 3,000 New York farms worth more than $1 million, according to federal statistics.

Homes and properties aside, many New Yorkers also own small businesses. Depending on the industry, even small firms generating a relatively modest net income for their owners can be worth a total of more than $1 million. And middle-class New York couples who don’t own a business can amass net assets of $1 million simply by following standard advice to save sufficiently for retirement.

Beyond its impact on individuals and families, many economists believe the death tax discourages savings and investment, and increases consumption by older wealthy people. Repealing the tax could ultimately boost the state’s net economic output by $5.6 billion — five times the revenue it currently generates — and lead to the creation of nearly 10,000 additional jobs, according to an analysis by the Beacon Hill Institute of Boston.

We must not forget the final perverse consequence of the current state estate tax. The wealthiest households can most easily hire high-priced accountants and estate planners to find legal means of minimizing the tax.

They are also more likely to move to reduce their tax, research has found — and they’ve got plenty of options. State death taxes are no longer imposed in much of the Midwest, almost all of the South, the entire Southwest and California.

Cuomo’s 2014-15 budget would reform the New York estate tax in two significant ways: by phasing in a higher basic exemption over the next five years, ultimately matching the federal threshold, and by cutting the state’s top death tax rate to 10% from the current 16%.

This would reduce the number of state death tax filings in New York by 90% — a giant first step toward complete repeal.

The moral case for and against the death tax has been debated nationally for decades now. But the strongest argument for Cuomo’s proposal is an eminently practical one: Why perpetuate yet another competitive disadvantage for New York when we’re already losing too many people and too much wealth to the rest of the country?