Question

Basically, the Estate tax and the Gift tax are a combined system, and are linked together. The question is why? Why does the tax law set up a "unified" system that combines gifts with the estate and has a combined tax that totals estate plus all lifetime taxable gifts? Do you think this is an effective way to combat the concerns that the government had in enacting the gift tax as a part of the estate tax?

Answer 1

The Gifts transfered during a person lifetime and after his passing are brought under assessment section by the unified estate and gifts act. They are interrelated on the grounds that government applies unified credit to both the transfers

The explanation unified system of credit is on the grounds that this area of tax law is complex and the contributors are proposed to counsel experts in the area of gift and estate tax to reduce their tax expense.

I think this is the best way a government can do to combat the deficiencies faced by it in enacting gift tax as a part of estate tax.