Well, capital gains are stupid in part because of the recordkeeping required. Making the basis for the inheritor be the date of death at least simplifies things. Imagine if you would how complicated things would be if an asset passes thru several estates before being sold. In general the estate tax is a good idea, if the tax rates are not too high, and they certainly are not.
Assets pass through multiple estates frequently, especially assets like real estate. The stepped up basis rules don't simplify anything. In fact, it often complicates the process because everyone has a different basis, depending upon when they received their interest in the property.
Stepped-up basis provides some relief to decedents who receive publicly-traded investments, but the societal cost of allowing the wealthy to transfer built-in tax-free gains is too steep. Eliminate taxes for the lower/middle class or follow the general concept of taxation.
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