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Should we Have a 100% Inheritance Tax?
The company remains as an entity; but it's ownership is given over to the goverment. Management could then be passed along to the most competent individual.
The company remains as an entity, and the government sells it to claim the tax.
Then the government would also inherit the risk of the company getting bankrupt or indebted. Once the government owns too many of those inherited companies they wouldn't be able to compete anymore. The government would eventually become a monopolist with all the economic disadvantages this entails.
Government doe not have a proven track record of being able to select competent individuals and good, fiscally responsible management. Quite the contrary.
Allowing the government to create laws which permit it to assume ownership over private business enterprises is basically equivalent to opening a window for forceful nationalization. The government has no such intrinsic right to value created by private individuals.
There are completely different entrepreneurial motivations between families vs goverments. Familes want to create wealth for its members in long term while the state wants to take it from them in short term.
The government has a bad track record for selecting the "most competent individual".