Tax Inheritance

Like Jonathan Orszag, I don't really understand why we (used to) tax estates rather than taxing inheritances. If Sheldon Adelson wants to give $50 to each American when he dies, there's no particular reason for the taxman to take a bite out of that. Conversely, if 100 different people all die in 2008 and each leave me $900,000 I really ought to may some taxes on my $90 million windfall. In practice, I imagine the consequences of switching from one situation to another wouldn't be large as these kind of extreme scenarios are obviously unlikely, but still it seems like we ought to do this properly.