Liberals and conservatives have long disagreed about how much economic inequality is fair. But one thing they generally share is a vision of America as a land of opportunity—a nation where, at least compared to other countries, one’s financial success should depend relatively little on the circumstances of one’s birth. To be sure, we have had, and continue to have, great failings in this regard, with slavery and disenfranchisement just two conspicuous examples. But as President Obama has said, “What makes us Americans is our shared commitment to an ideal—that all of us are created equal, and all of us have the chance to make of our lives what we will.”

Despite this shared commitment, our tax code often ignores barriers to equality of opportunity. Nowhere is this more apparent than the taxation of wealth transfers. Perhaps the paradigmatic example of unequal opportunities is one child inheriting tens of millions of dollars while another inherits none. But our income and payroll taxes allow recipients of large inheritances to exclude the entire amount they inherit from their tax returns, while children who do not start out so lucky, and have to live solely off their earnings rather than their inheritances, of course pay both of these taxes on everything they earn.

The estate tax and its cousins were meant to partially address this omission. The estate tax applies to wealth transfers made at death (bequests) and the gift tax to large wealth transfers made while alive. Both taxes only apply once the sum of gifts and bequests exceeds a large lifetime exemption amount.

But over time these taxes have withered, declining from a peak of 2.6 percent of federal revenues in 1972 to 0.6 percent today. For example, because Congress has raised the exemption and lowered the rate over time, if a couple transfers $12 million to their children in 2017, the wealth transfer tax due is only $400,000, or 3 percent. Broadening economic opportunity in America will require many changes, but one vital reform is strengthening the taxation of financial inheritances.

By increasing taxes on the largest wealth transfers and potentially changing the structure of the estate tax to a direct tax on the amount received rather than the amount transferred, we can ensure that those who receive extraordinarily large inheritances are not taxed at lower rates than those who earn their income from work. In the process, we can raise a significant amount of revenue to fund investments in children and young adults who are not as fortunate.

There are two types of economic inequality we often care about. The first is within-generation disparities in income, wealth, or other measures of economic well-being. Both income and wealth are highly concentrated in the United States; the top 1 percent of households receives 15 percent of all income and holds 35 percent of all wealth. Wealth transfers increase within-generational inequality on an absolute but not relative basis. That is, a millionaire tends to have inherited more than ten times as much as someone with average income, but inheritances represent a smaller share of the millionaire’s income. This pattern occurs because of what economists call regression to the mean: The child of someone who earns $100 million a year is likely to earn less than her parent, even including the amount she inherits.

But just as important is a second type of inequality: disparities in economic opportunity from one generation to the next. A child whose parents earn $10 million a year will, on average, be radically better off economically than one whose parents earn $10,000. And in this regard, we are not living up to our self-image as a country. Economist Miles Corak estimates that the United States has one of the lowest levels of intergenerational economic mobility (a measure of opportunity inequality) among our competitor nations. In the United States, a father on average passes on roughly half of his economic advantage or disadvantage to his son. Among most of our competitors, the comparable figure is less than one-third, and for several it is less than one-fifth.

This relative ossification of economic mobility undermines our shared values. It also impedes economic growth. In earlier times, we missed out on the talents of many Americans by prohibiting them from pursuing careers in which they could excel, whether by law or intimidation. Today, we also miss out on many Americans’ talents, but the causes are generally subtler.

One could fairly ask whether we are stuck with our relatively low level of economic mobility. Perhaps it is largely due to heritable traits, not societal choices. But here’s the kicker: Economists Samuel Bowles, Adrian Adermon, and co-authors have found that 30 percent of the correlation between parent and child incomes—and more than 50 percent of the correlation between the wealth of parents and the wealth of their children—is attributable to financial inheritances. This is far more than the impact of IQ, schooling, and personality combined.

In short, when researchers have tried to boil our economic opportunity problem down to one factor, it is about financial inheritances. And make no mistake, financial inheritances are distributed very unevenly. More than 80 percent of individuals inherit less than $100,000. But the 1 percent who inherit more than $1 million account for about a quarter of the value of all bequests.

If financial inheritances drive inequality in life chances this much, one would think that our tax code would at least try to soften their effects. But current policies do a remarkably bad job in this regard. If a wealthy individual bequeaths assets with $100 million in unrealized gains, neither that individual nor her heir ever has to pay income or payroll tax on that $100 million gain. In addition, as noted above, the recipients of large inheritances never have to pay income or payroll tax on the total amount they inherit, whether attributable to unrealized gains or not.

Some argue any income or payroll tax previously paid by a wealthy individual on gifts and bequests they make should count as tax paid by the heir. But they are two separate people. When a wealthy individual pays his assistant’s wages out of after-tax funds, we don’t think the assistant has thereby paid tax on her own wages. Others argue that the income tax should only apply to money earned for exchanging goods and services. But the income tax does and should apply to other forms of income that increase one’s ability to pay, like winning the lottery. (Which, after all, isn’t much different than receiving a large inheritance.)

In short, today the income and payroll taxes effectively tax unearned income in the form of inheritances at a rate of zero.

Wealth transfer taxes play an important role in partially addressing this inequity. But wealth transfer taxes have shrunk to such low levels that, even after including them, inherited income is still taxed at less than one-quarter of the rate on income from work and savings.

What we know of President-elect Trump’s finances provides a useful case study of how this plays out in the real world. Trump did not owe federal income or payroll tax on the millions of dollars he reportedly inherited. And for more than a decade he appears to have been able to pay no federal income tax and very little federal payroll tax on the profits of the businesses he built with funds lent by and inherited from his father. Instead, the only significant federal tax he bore over the past couple decades may have been any estate tax paid on his inheritance.

President-elect Trump and House Republicans are proposing to amplify these tax advantages for the most fortunate by repealing the estate tax. Doing so would enable the few Americans lucky enough to be born into families as wealthy as Trump’s to avoid paying any federal tax whatsoever on their multi-million dollar inheritances.

A fairer system would tax large inheritances at a higher rate than income from work, not lower. Recipients of large inheritances are better off than people who earn the same amount of money by working. In economist-speak, they have no “opportunity cost”: They have not had to give up any leisure or earning opportunities in order to receive their inheritance. All else equal, it is therefore fairer for them to pay more taxes, not less. But all else is not equal. Heirs of large inheritances also typically have a huge leg up in earning income if they choose to work. They have access to the best education, influential family friends, interest-free or low-interest loans, and a safety net if they take risks that don’t pan out. Just think of how President-elect Trump’s father reportedly sent his lawyer to buy $3.5 million in chips from Trump’s casino when it was in dire financial straits, and then leave without cashing them out. A small-business owner who pulled herself up by her bootstraps couldn’t get this kind of no-strings-attached cash infusion. This further strengthens the case for taxing inheritances at a higher rate.

Increasing the progressivity of income and payroll taxes would certainly go a long way toward broadening opportunity. Indeed, former Council of Economic Advisers Chair Alan Krueger and others have identified the “The Great Gatsby Curve,” in which countries with more within-generation income and wealth inequality also exhibit less economic mobility across generations.

But this approach would leave significant holes if not accompanied by stronger taxes on wealth transfers specifically. Even more progressive income and payroll taxes cannot ensure that large inheritances are taxed at similar or higher rates than wage income, so long as inheritances are excluded from their tax base. The same is true of proposals to adopt a tax on wealth, as opposed to wealth transfers.

Congressional Republicans and the President-elect are poised to further exacerbate these inequities by repealing the estate tax entirely. Instead, there are at least three ways we should strengthen wealth transfer taxes to expand economic mobility.

The first is simply to raise the rate. There are two main components of the U.S. wealth transfer tax system: the estate tax on bequests, and the gift tax on wealth transfers made during life. Currently, transferors are entitled to a lifetime exemption of $5.5 million ($11 million per couple). If their combined gifts and bequests exceed this threshold, the excess is taxed at a rate of 40 percent. Transferors can also exclude $14,000 ($28,000 per couple) in gifts each year to a given heir, meaning such gifts don’t even count toward the lifetime exemption. Currently only 0.2 percent of estates owe any estate tax.

Many Democrats, including Hillary Clinton and Bernie Sanders, have proposed reducing the lifetime exemption to $3.5 million ($7 million per couple) and raising the rate to 45 percent on amounts immediately above this threshold, rising to 65 percent to the extent estates exceed $1 billion per couple. This proposal would raise roughly $235 billion over the next decade.

A second, complementary reform would be to repeal so-called “stepped-up basis.” This is the provision that completely exempts all accrued gains on bequeathed assets from income and payroll taxes, by “stepping up” the basis of an asset to its fair market value when it is transferred. Suppose, for example, that a father purchased stock decades ago for $10,000 that is now worth $10 million and leaves it to his son. Stepped-up basis means the son’s basis in the stock is “stepped up” to its current value, so neither the father nor his son ever pays tax on the capital gain of almost $10 million. President Obama proposed repealing stepped-up basis, subject to several carve-outs including an exemption for the first $100,000 in accrued gains ($200,000 per couple). Together with raising the capital gains rate to 28 percent, this proposal would raise $210 billion over a decade and significantly more over time as it phases in. This proposal is highly progressive because inheritances are so concentrated and accrued gains are even more so. The Treasury Department estimates that 99 percent of the revenue raised would come from the top 1 percent, and 80 percent from the top 0.1 percent.

A third, more fundamental reform, which could be coupled with repealing stepped-up basis, is to replace the estate and gift taxes with a direct tax on the recipients of large inheritances. Under current law, the lifetime exemption for the estate and gift taxes applies to amounts transferred by those doing the giving, not the amount inherited by the heir. For example, suppose an only child, Richie Rich, receives $5 million in four different bequests from each of his parents and step-parents. This $20 million he inherits is exempt from estate and income taxes because each bequest is under the exemption amount. But under an inheritance tax, the exemption would be based on the total amount he receives instead.

I have proposed requiring heirs of large inheritances to pay income tax plus a surcharge on amounts they inherit above a large lifetime exemption. If the lifetime exemption was $2.1 million, and the surcharge was 15 percent (roughly equal to the maximum payroll tax rate) such an inheritance tax would raise roughly $200 billion over 10 years. Under this proposal, Richie would have to pay income tax plus a 15 percent tax on $17.9 million of the $20 million he inherited.

To state the obvious, $2.1 million is a lot of money. An individual who inherits that amount at age 21 can live off her inheritance for the rest of her life without anyone in her house ever working, and her annual household income will still be higher than eight out of 10 American families.

Such an inheritance tax has several advantages compared to our current estate tax.

Experts on both sides of the aisle, including President Bush’s Council of Economic Advisers Chair, Greg Mankiw, agree that wealth transfer taxes are largely borne by the heirs of big estates, not their benefactors, regardless of who technically remits the tax. Indeed, it would be more accurate to call wealth transfer taxes “silver spoon taxes,” not “death taxes.”

But one advantage of an inheritance tax is that it would more fairly allocate the burden of wealth transfer taxes among heirs. Not all large inheritances come from the largest estates, and some small inheritances come from relatively large estates. In addition, this type of inheritance tax would apply different rates to heirs based on their total income. As a result, Surachai Khitatrakun and I have estimated that about 30 percent of the burden of the inheritance tax in dollar terms would fall on different heirs than under a revenue-equivalent estate tax. While roughly one-third of heirs burdened by the estate tax have inherited less than $1 million, none would owe any inheritance tax.

These differences should not be taken as a fundamental critique of the current estate tax. It is overwhelmingly borne by the recipients of large inheritances. Its burdens are just allocated among the recipients of large inheritances less precisely than under an inheritance tax.

A second, potentially even more important advantage of such an inheritance tax is that it could better align public understanding of wealth transfer taxes with their actual economic effects. The structure of an estate tax makes it easy for opponents to characterize it as a double tax on the frugal, generous entrepreneur who just wants to take care of his family after death. In fact, nothing could be further from the truth. As the example of President-elect Trump illustrates, the estate tax is actually the only tax that ensures wealthy heirs pay at least some tax on their large inheritances—even if at a much lower rate than their personal assistants pay on their wages. But this imagery is powerful. Perhaps as a result, most countries around the world that had estate taxes historically have either repealed them or replaced them with inheritance taxes.

The structure of an inheritance tax makes the inequities of our current system clearer. It simply requires wealthy heirs to pay income tax on their large inheritances like all American workers pay tax on their earnings. Even with a surcharge, wealthy heirs would still typically pay a lower rate of tax on their inherited income than workers pay on a similar amount of labor income because of the large exemption, which workers cannot claim on their wages.

There are further advantages of an inheritance tax that apply equally to an estate tax and to repealing stepped-up basis.

The ossification of economic mobility is strongest at the top and the bottom. Bhashkar Mazumder and others have found that children from very disadvantaged households have the hardest time moving up the economic ladder, while children from the most privileged households are least likely to move down, making way for others. This is not to say, of course, that we should aim for the most privileged children to be worse off than their parents. But we should aspire to a society where our children’s economic futures are determined more by their dreams and the strength of their effort than by whether they were lucky enough to come from extraordinary wealth.

By limiting their reach to those receiving exceptionally large inheritances, all three reform options I have outlined would soften the relative advantages of being born at the very top. The financial gifts and bequests that middle-class parents, or even fairly affluent parents, give to their children would be unaffected.

All three reforms would also raise a significant amount of revenue that could be used to mitigate the barriers to economic mobility that children from low- and middle-income families face. For example, the hundreds of billions of dollars raised could be used to fund universal pre-K, expand the child tax credit for low- and middle-income working parents with young children, and increase the wage subsidy provided by the earned-income tax credit for childless, typically young adults.

Further, raising more revenue from large inheritances would be relatively efficient. It is an article of faith among estate tax opponents that wealth transfer taxes harm the economy because they discourage work and saving among very wealthy individuals. But in order for these effects to occur, the very wealthy would need to place a high value on the amount their heirs will inherit after-tax when making work and saving decisions. In fact, a large body of empirical research finds this is not the case, and that the amount that the most affluent accumulate for wealth transfers is relatively unresponsive to the wealth transfer tax rate.

Moreover, any negative incentive effects that wealth transfer taxes might have on wealthy transferors are at least partially offset by their positive incentive effects on the next generation. Such taxes induce heirs to work and save more because heirs do not have as large an inheritance to live off of as a result. Wealth transfer taxes also improve business productivity. Several studies have found that businesses run by heirs perform worse because nepotism limits labor market competition for the best manager. Repealing stepped-up basis has even more efficiency benefits because it reduces current law’s “lock-in” incentives to hold on to underperforming assets purely for tax reasons. For all these reasons, wealth transfer taxes may be more efficient than comparably progressive income and wealth taxes.

But the biggest reason to strengthen wealth transfer taxes remains their ability to mitigate the unique role of financial inheritances constraining economic opportunity. Remember, financial inheritances limit intergenerational economic mobility more than IQ, schooling, and personality combined!

Franklin Delano Roosevelt once said “inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our government.” The same could be said today. Rather than falling near the bottom among our competitors on this score, we can recommit to our shared vision of America as a land of opportunity. A first step is to start taxing extraordinarily large inheritances like we tax good old hard work.