[iso1631]

I pay tax when I earn money, I then give it to my mechanic to service my car, and I pay more tax on that, he then pays tax on the money I give him.

Why should inheritance be any different?

[OscarCunningham]

(I came back and edited this answer completely.)

The difference is that when you give money to your children, you're not getting any goods or services in exchange. The transaction is making them richer, but you poorer by the same amount.

(Also, later when the children pay a mechanic the amount of total tax paid will be the same.)

[iso1631]

> The difference is that when you give money to your children, you're not getting any goods or services in exchange

Maybe you are, maybe you aren't. What if my kid is a mechanic and does the work for me?