There seems to be a simpler fix though, that avoids the major negative effects of the larger changes.
They take out loans and aren't taxed on it. But they have to pay taxes when they pay off the loans, and at that time they'll owe even more money meaning more stocks will have to be sold.
But wait, how are they avoiding that tax even then? Well they take out another loan. But eventually that stops. They can't take out infinite loans, so what is happening? When they die, there is some tax trickery that involves resetting the cost basis of assets, then selling them with 0 capital gains to pay off the loans. The simple fix is to only reset the values after the estate pays out, meaning that any assets sold to pay off any loans will have to pay the real tax on their value, and only afterwards is the cost basis reset when inheritors receive those assets.
That seems a much more minimally invasive change, and also seems much more in line with the intent of the existing tax code to begin with, as the cost basis should only reset for those inheriting and not for paying off existing debts.
I feel you're missing the forest for the trees... You're advocating a policy of the ultra rich not having to pay tax during their lifetime because it's less complicated.
I understand you're viewing it as a tax increase as the estate pays less tax on death under the current system, but sometimes you need to realise you're stuck in the overton window.
They take out loans and aren't taxed on it. But they have to pay taxes when they pay off the loans, and at that time they'll owe even more money meaning more stocks will have to be sold.
But wait, how are they avoiding that tax even then? Well they take out another loan. But eventually that stops. They can't take out infinite loans, so what is happening? When they die, there is some tax trickery that involves resetting the cost basis of assets, then selling them with 0 capital gains to pay off the loans. The simple fix is to only reset the values after the estate pays out, meaning that any assets sold to pay off any loans will have to pay the real tax on their value, and only afterwards is the cost basis reset when inheritors receive those assets.
That seems a much more minimally invasive change, and also seems much more in line with the intent of the existing tax code to begin with, as the cost basis should only reset for those inheriting and not for paying off existing debts.