There is such a stupidly easy solution to this, which is to set a lower limit for whatever rule applies.
Though... even though things like estate taxes have these rules (either "first million isn't taxed" or "primary residence isn't taxed" etc, depending on jursidiction), most people tend to not actually read the details and assume that the gov't wants to take the family farm.
No, I don't think it's your god-given right to hand down a $2 million townhouse without paying taxes.
You don't have the god-given right to take it, either :-)
Taxes should be extracted as needed to support things that only government can do. Taxes should not be extracted based on envy, or just because they can be.
Taxes are a tool in the toolbox to organizing society for progress as a whole.
I think that making it so that people who have a lot of accumulated wealth are asked to put more into the collective coffers is an extremely obvious and fair-ish way of doing things. Much more so than dumb things like "roads should be paid for by gas taxes" (we don't pay for libraries with book taxes! Or schools with child labor income tax!)
Though... even though things like estate taxes have these rules (either "first million isn't taxed" or "primary residence isn't taxed" etc, depending on jursidiction), most people tend to not actually read the details and assume that the gov't wants to take the family farm.
No, I don't think it's your god-given right to hand down a $2 million townhouse without paying taxes.