The Congressional Research Service has released Economic Issues Surrounding the Estate and Gift Tax:  A Brief Summary (RS20609), also available on the Tax Analysts web site as Doc 2005-11653, 2005 TNT 102-48.  Here is the Summary:

Supporters of the estate and gift tax argue that it provides progressivity in the federal tax system, provides a backstop to the individual income tax and appropriately targets assets that are bestowed on heirs rather than assets earned through their hard work and effort. However, progressivity can be obtained through the income tax and the estate and gift tax is an imperfect backstop to the income tax. Critics argue that the tax discourages savings, harms small businesses and farms, taxes resources already subject to income taxes, and adds to the complexity of the tax system. Critics also suggest death is an inappropriate time to impose a tax. However, the effect on savings is uncertain, most farms and small businesses do not pay the tax, and complexity could be reduced through reform of the tax. This report will be updated as legislative developments warrant.