If you were a politician...

[angus]

I would not.  I'm for simplifying the tax code, which usually means a flat tax rate.  The estate tax is pretty simple:  somebody gives you a sh**tload of money, for free, and it's reasonable that the government taxes a certain percent.  I'm absolutely against what politicus suggests.  That only further complicates the tax code.  Also, it isn't justified.  If you tax estates, then you tax estates regardless of whether it comes in the form of pigs or lucky gambling.  I'm okay with taxing them.  If I have to pay for schools and roads and bridges out of my hard-earned income, then you can bet it's okay for some fortunate son to have to pay for them out of his freebies.

[angus]

Part of the problem is that land and other assets can appreciate with time.

What is the value of a gift?  If you give me a house that you paid 30 thousand dollars for in 1965, is that house worth 30 thousand dollars?  Is it worth some arbitrary figure determined by assessors based on similar houses in the neighborhood?  Probably it is worth whatever someone will pay for it, and as you suggest that won't be determined till it is sold.  It's really a difficult thing to simplify taxes when they're based on values that aren't really simple to begin with.  I like the idea of taxing the property upon transfer not only because it legitimizes the taxable value but also because it guarantees that the heir can actually afford to pay the taxes.  Unfortunately, that creates loopholes to be exploited.

[angus]

Why not just spend it? Why not give it away?

Well, to be fair, we love our children.  (Or perhaps we desire immortality and cannot achieve it, so passing on our genes and our ideologies forward, in smaller versions of ourselves, is the closest we can achieve, and since the mini-me versions of ourselves represent us in the abstract, we want those versions to succeed in life, and we call that love.)  Whatever, in any case we all want our children to have as much as we can give them.  When we're alive we direct the spending of our fortunes in a way that will benefit our families.  We know best what is good for them so it is important that we insist on that oversight.  Once we're dead, we no longer have the ability to direct the spending, and if we have educated our progeny well, we have a reasonable hope that they will spend the money in a manner in which we would approve.

If I had a billion dollars of course I'd leave it to my child.  I might also leave some to the hospital that birthed him, and some to the university that schooled him, and some to the NGO that funded the research that lead to a cure for his disease, but the bulk of it I'd leave to my child.  Still, I also think that it is fair that he can be expected to help fund his government's program with his massive inheritance.  After all, a stable functioning state with good roads and good schools and equal opportunity for all is in his best interest as well.