[mattmcknight]

The argument is that they already own it. My kids have rooms in my house now. You are saying they should have to give money to other people (i.e., be taxed) for those rooms when I die? They are getting food and education costs based on the profits from my company- I die so they must be taxed on that on top of the income tax? It's not income from an inheritance, it's a continuation of what they are already getting tax free. My death shouldn't have anything to do with it.

[petewarden]

They're already benefiting from the money you've earned, but that doesn't mean they own it in any meaningful way. You have complete control over your assets, you can refuse to support your kids and they can't head to Vegas and gamble it away.

As a general rule we tax assets when they change ownership, maybe because the benefit to the recipient cushions the pain of giving away part of it to other people.

[Locke1689]

Just to be clear, the tax is on a transfer of money, not on the money itself. If you transfer only $10 million to your family, the tax will only apply to that $10 million in transfer. Similarly, if you gift them $10 million while they are alive, that money will be subject to taxes.