I think we should apply a death tax only to dead people. A 100% tax on post-death income to the estates of the dead. That should speed up the settlement process.
If it really was an "inheritance" tax, then each person would have an "inheritance tax allowance", that is the amount they are allowed to inherit before the taxes start. So if 20 of my ancestors all kicked the bucket at once, each leaving me a modest fortune that adds up to a large total, then I would be liable for a hefty inheritance tax bill. Whereas, if great aunt Mabel died and left $1000 for each of her 1000 progeny, then no tax would be due, as surely a measly sum like $1000 would fall below any reasonable inheritance limit.
The "death" or "estate" tax is levied on the value of the assets of the person who died, not on the value of the amount received by an individual who inherits. Ergo, it's a death tax.
Small nitpick: It isn't a "gift of $22 million" but a bequest. If gifts of 22 million were allowed free of tax, then absolutely nobody would ever pay inheritance taxes. The current annual limit for non-taxable gifts is $15,000 per recipient.
Wonder why wealthy US families like having lots of grandkids? Because each can receive 15K into their trust fund tax-free from each elderly relative per year. Amongst established families this is the primary means of moving money between generations. And if you are pregnant now, getting the baby born before Monday means a 15K bonus that it won't get if born on Tuesday.
Your reasoning about the allowances is backwards. If you lose a parent, an uncle and a grandparent all in one year, and get $22 million from each, then you have had a $66 million dollar "tax allowance". There's only one of you, but there are 3 deaths, so $22 million per death, ergo, a death tax. Conversely, if you work for 3 companies, you don't get to consider each income separately and pay only the bottom bracket of income tax for each of them; you pay the bracket that is appropriate for your total income, because it's an income tax, not a having-an-employee tax. (in the UK we also have a 'having-an-employee' tax, but that's handled separately).
What if they provided a comfortable lifestyle for their children? Would that just be taken away by the government upon the parent's death?
I agree that it should be paid as an income tax, at the appropriate tax bracket of the inheritor. If it stays within the estate, then at the relevant income tax bracket for the estate.
If there isn't any income tax on estates, then I see your point and that should definitely be changed.
As we live longer, we're also able to have children later, and I know many people in their twenties who have had parents pass away or expect it to happen soon.
Nonetheless, with enough kids, that money doesn't go terribly far in the Bay Area.