I should probably preface this by saying I am discussing this idea in principle rather than in practice, so arguments about the incompetency of government, etc. should have no bearing just now.
I'm having trouble reconciling the concept of inheritance (a transfer payment) with that of either capitalism or meritocracy. Surely a society that subscribes to either ideology must consider bequests to be a violation of their principles? I would be very interested to hear people's opinions on this, but let me make a few brief points first.
The argument for a 100% tax rate seems pretty compelling to me... The most immediate of these is the government revenue that it would produce, which could be used for any number of worthwhile purposes. It could be redistributed to the lower classes, increasing their opportunities in life and reducing wealth inequality. Those 'deprived' of large inheritances would be forced to earn their keep in life, rather than living off their parents' work.
This would go some way towards satisfying a basic tenet of both capitalism and meritocracy, that of equality of opportunity (as opposed to the equality of outcome espoused by Communism). Abolishing inheritance would also help to reduce wealth inequality (again, as opposed to income inequality).
A number of obvious objections doubtless come to mind, and I would love to hear them. I think I can respond to most of them, but I am interested to see what others think.