Thanks for your thoughtful replies!
Regarding income tax, we have something close to a "flat tax" for most people now. Although the top income tax bracket is nominally 35% or so, investment income and earned income above the wage base isn't subject to employment/self-employment taxes of about 12 to 15% (it's a little complicated because of the 2.9% medicare tax).
For example, a wage earner may only pay income tax of 18%, but must also bear employment tax (employer and employee parts) of about 15% on earned income, making the total tax rate approximately 33%, compared with 35% for ordinary investment income at the highest bracket or 15% for capital gains and dividends.
With that said, my main focus was on the estate tax. While I agree steep income tax rates create disincentives, the estate tax is a different story. A high estate tax rate isn't likely to cause anyone to change their date of death.
