What about smaller, privately owned businesses? For example, if you own a company worth $5,000,000 and die than your estate needs to come up with $2,500,000 in taxes.
The problem is, owning a company worth $5,000,000 doesn't mean you necessarily have $2.5 mil in spare cash laying around.
For this reason, estate taxes encourage businesses to go public so that they can convert the value of their business into liquid assets enabling their estate to easily pay taxes. Or, if going public isn't an option, often the estate needs to sell the business to a larger corporation.
End result is, these smaller $5 - $20 million dollar corporations disappear when the founder dies and they morph into bigger, lifeless enterprises. That's not to say all small businesses are great places to work, but if you ever talk to people that work for founder ran enterprises vs. shareholder ran enterprises there is often a significant difference in quality of life and in how the owners treat their workers.
Estate taxes kill small businesses and also raise very little revenue.