Some people view the taxation of inheritances as a limit on inequality (see part 1), however I think a more key reason is that it prevents a family from accruing massive ownership which would eventually change the power dynamics for government.

Witness Lord Ashcroft's woes in Belize, where he controls a great deal of capital relative to the total size of the economy. The government's taking of some of his property works like a "life tax" to limit his power there. 100 years ago, this open warfare would probably have resulted in redcoats making a cursory visit to decapitate Belize's president, or were it not a British Lord, perhaps we would have seen an old man in jail on trumped up charges. Today (thankfully), we see a less deadly power struggle between an individual and a government.

Self-preserving governments should act to avoid such struggles, so they tax the accumulation of wealth.

I'm still searching for numbers, but as far as I know, the correlation between one's wealth and one's grandchildrens' wealth is quite low. Apparently a significant factor in this is genetic reversion to the mean. Given my limited view of history it would seem far more productive to try to engineer a government that is resistant to corruption (what seems to be the real problem) than to limit the amount of wealth anyone can accrue; many governments have found that corruption need not take a pecuniary form, to their detriment. Theo

Well, one could construe a low correlation for intergenerational differences in wealth as inheritance taxes at work. The family that spent time creating good progeny ( vis-a-vis Judit Polgar and her siblings ) would tend and develop the family estate, so that every family member was free from physical want. Holding many assets in several trade-related countries may allow a family to play divide and conquer with the countries: should a country become truculent, we lean on the other countries to lean on the misbehaving one. Difficulty arrives when an economic downturn affects all countries together and societies turn on themselves....