Do you see the card he palmed? Basically, the effect of letting the Bush cuts expire is so tiny that the only way to make it noticeable is to compound it over 30 years, which reduces his eventual payout from $2,000 to $1,700. (And even that's probably overstated, since it assumes Mankiw pays all his taxes at their full statutory rate, which virtually no one does.) The rest of the reduction down to $1,000 comes solely from the estate tax. But even on the heroic assumption that you should take this year's zero rate as the baseline for comparison, the estate tax has an exemption of several million dollars. Unless Mankiw leaves his kids a helluva lot more than they need for a down payment on a house, they won't pay a dime of estate tax.
In general estate tax agitating is the most nakedly cynical Republican plank, as--given the income distributions in this country--it gets a whole lot of people to at least vote for something that doesn't affect them at all, if it doesn't get them to vote against their own economic interests.