This would hurt family owned businesses. Under such a system, within a family, everyone would keep their money to themselves. Let's say your dad wants to open a restaurant, so you donate $1 million, and the business does well, but then he unexpectedly dies and the his net worth is assessed at $5 million. Now you are out $1 million due to the tax. pretty bad deal.
Why donate? Why wouldn't you invest in it and become part-owner yourself?
But you can also flip that around: Let's say your dad opened a Facebook, but then dies, why should you get $98 billion? You didn't do anything. Why is that now yours in the first place?
