That may all be true, but I don't feel it supports the argument that his kids should inherit the wealth created by his hard work, or luck, or cunning, tax-free. The income the enterprise generated was taxed along the way but not the growth in the value of the capital. Under our tax system, the capital gain is not taxed when property is inherited. The estate tax is a backstop to the capital gain that would other wise escape being taxed. Keep in mind, many large, taxable estates ($20mil -$30mil) pay no estate tax. There are many techniques to be employed to pass vast wealth to kids without