But the Democrats will fix this problem; they've been working on it for decades. Okay, not necessarily the part about "Double Taxation"... I was thinking about all of the dead voters for Democratic Candidates showing that they really CAN have "Representation".

It seems to me that the right result is to kill the estate tax, but provide (i) that the estate establish and file a written cost basis (as of time of actual purchase, not death) by appraisal or other reasonable means for every material asset in the estate, and failure to do so would result in a basis of $0, and (ii) that the step-up in basis be eliminated. Then, if people sell assets they have inherited they would pay tax on the long-term capital gain, and there would be documents to support the audit. So if the IRS audits me it would be entitled to ask "where is Uncle Bob's complete set of proof Double Eagles, which had a verified basis of $300,000?" If I can't produce the Double Eagles, I would owe tax on the gain above the documented basis. Even if the documented basis were $0, the tax would be straightforward and not unreasonable (since the heir didn't pay anything to get the asset in the first place).

This system would eliminate the perverse incentives in the estate tax and perhaps even increase total revenue, since it would apply to all estates, not just the big ones.