As David Logan of the Tax Foundation noted in a recent public testimony, proponents of a tax on one's estate at death mistakenly emphasize three outcomes.
The break up of large concentrations of wealth
Given that wealthy people are likely to bequeath to multiple people anyway, this is, to a large degree, a non-issue. The wealth is already broken up. Regardless, wealthy people can bequeath prior to death (inter vivos), and attempts to tax them beyond what they can avoid will discourage greater wealth generation, a "virtue tax."
In terms of inequality, who said the money was going to other wealthy people? It may not, and two prominent studies have shown that inherited wealth has almost zero impact on such inequality.
"When wealthy investors were polled, only 7 percent indicated that inheritance was a source of any of their wealth, and it is estimated that 85 percent of millionaires in this country are the product of self-made success."
Increased revenue for state services
Given that the death tax only brings in 0.3 percent of North Carolina's general fund revenue, this would appear foolish at face value. However, there are good reasons why a death tax, even if imposed at a higher rate, would fail to generate revenue for a state.