evidence: Ends Capital Income Tax Breaks and Other Loopholes for the Very Wealthy. The President’s Budget will end one of the most unfair aspects of our tax system—the fact that the tax rate the wealthy pay on capital gains and dividends is less than the tax rate that many middle-class families pay on their wages. Households making over $1 million—the top 0.4 percent of all households—will pay the same 39.6 percent marginal rate on their income just like a high-paid worker pays on their wages. Moreover, the Budget eliminates the loophole that allows the wealthiest Americans to entirely escape paying taxes on their wealth by passing it down to heirs. Today, our tax laws allow these accumulated gains to be passed down across generations untaxed, exacerbating inequality. The Budget will close this loophole, ending the practice of "stepping-up" the basis for gains in excess of $5 million per person and $10 million per married couple ($5.25 and $10.5 million, respectively, when combined with existing real estate exemptions), and making sure the gains are taxed if the property is not donated to charity. The reform is designed with protections so that family-owned businesses and farms will not have to pay taxes when given to heirs who continue to run the business. Without these changes, billions in capital income would continue to escape capital gains taxation entirely.