Quote Originally Posted by Lewkowski View Post
I might be wrong but I believe the reason for high rates on gift taxes is due to preventing people from gifting their way out of the estate tax.
Yes, that is it, but there is a layer of exemption. I forget what it is. 10K per year? 20K? A person with foresight can transfer a moderate amount of wealth untaxed. There are also trust funds, which are taxed less IIRC.