Actually, in the US gifts are taxable, I believe.
The simplest arrangement, of course, would be to treat gift and inheritance as income in the year you obtain it. Not that hard to monitor: your great-aunt has died and left you USD$50,000 in a year in which you earned USD$20,000, so your gross income should be USD$70,000 and that's it. Then, of course, you could have different rates not only for wage and investment, but also for inheritance income. But the default should be that it is your income, period.
Yes, that was my point.
Ok, so that's what you meant. When you said income derived from the estate I thought you meant income streams or something. I guess that sounds fairly reasonable. Of course, when you're forcing people to give up family houses or heirlooms because they can't afford to pay 30% or 50% of its value in taxes (or whatever the income tax rate is in one's country) people will be mightily pissed. Then again, if you have very low rates they won't. But if the rates get really low you can start wondering what the point of them is overall...