I'm interested how society would become less free. Would it not increase social mobility? Or are you thinking of something else?
By less free, I mean that anyone who wants to leave their children the fruits of their labour is now unable to do so. The more restrictions on individuals, the less free a society is. And it is a very big motivator for some people - many people value the standard of living of their children higher than their own.
But I do get your utilitarian argument. After all, every next dollar of our wealth we value less than the previous one. So in this sense, I can see why you would think that redistributing that wealth would make the society better off overall. But I think you misjudge the effects of consumption vs investment and of the incentives on the overall wealth of a society.
I think this is a fallacy. Freedom, when defined this way (taken to its extreme), is not desirable for society as a whole. It only helps the wealthy and powerful and works against the poor.
If you are poor or indebted, you are not really free, even if there are no individual restrictions. People in need will probably be inclined to "freely" take out loans, giving up their freedom. Wealthy people may want to keep a good portion of society in need so they'll always be "freely" working for them.
It generally involves becoming less materialistic than the average American, though.
The fruits of your labour argument is a good one which is why I would advocate a 100% inheritance tax.
I'm less convinced by your freedom argument, taken to its logical conclusion, murder should be legal because you're removing the rights of the murderer to do what they want. So I guess it comes down to where you draw the line?
Consumption v investment. There are good arguments each way, I don't know if higher inheritance tax would lead to higher of either. I think they tend to form a balance though.
And yet, there's a difference between, say, a 30% inheritance tax and a 100% inheritance tax. The 100% tax means that you cannot leave anything to your children. The 30% tax means that you cannot leave all of it to your children. One is more prohibitive (and therefore infringing) than the other.