What GP proposed was a Wealth Tax which is an additional tax on _living_ people who have a net worth over a certain amount.
What you linked is an Estate Tax (aka death/inheritance tax) which only applies when someone passes wealth on after death. If they decide to give all their money away to charity or otherwise spend it while they're alive it does not apply.
"As a result, only about 2,000 estates per year in the US are currently liable for federal estate tax." [2]
The argument that it "discourages living frugally" is just complete nonsense.
[1]: https://www.irs.gov/businesses/small-businesses-self-employe...
[2]: https://en.m.wikipedia.org/wiki/Estate_tax_in_the_United_Sta...