David Logan puts it starkly:
Simply put, the federal estate tax does nobody any good.
Estate taxes are generally levied for two reasons: To break up concentrations of dynastic wealth and to raise significant tax revenues. The seminal 1987 NBER paper by B. Douglas Bernheim, Does the Estate Tax Raise Revenue?, suggests that the estate tax accomplishes neither of these goals.
In fact, according to Mr. Logan, the net effect of the estate tax may be to reduce revenue.
Anybody working in the financial world quickly realizes there is a much more powerful force to break up dynastic wealth than the estate tax. They’re called “beneficiaries.”
To the extent the estate tax does any good, it’s does so through the basis-step up at death — solving the need to dig through ancient or lost records to determine tax basis. Still, that goal could be accomplished by other means at much lower marginal rates.