Death is not a taxable event, especially not when you're trying to tax a pile of after tax money. Estate tax is a joke; however, some of the stepped-up basis loopholes are even more ridiculous. Allowing people to pass tax-free built-in gains to their descendants is equally stupid.
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.