Death Taxes penalize work and saving and encourages large-scale consumption by the very rich.
Because charitable donations are also deductible for income tax purposes, the tax system as a whole is much friendlier to gifts during life than to gifts made at death. The distortionary effects of the death tax result in losses under the income tax that are roughly the same size as the death tax revenue. The current federal estate tax has been in effect since 1916. This gift tax was repealed two years later, but was reinstated in 1932. During the years 1943-1976 the basic provisions of the federal estate and gift tax laws remained substantially unchanged.