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Q&A: Government's income from estate, gift taxes

Income from estate, gift taxes

How much income is lost by the lack of an estate tax in 2010?

The estate tax began in the United States in 1916. The gift tax was added in 1924 to close a loophole some were using to avoid the estate tax — they would just give the money to their relatives before death.

Since then both have contributed, in a small way, to the federal government's tax revenues. It's estimated that less than 2 percent of the total tax revenues come from the estate and gift taxes.

In 2007, $26 billion came from the estate ($23.6 billion) and gift ($2.4 billion) taxes, according to the Congressional Budget Office. In 2008 it was $28.8 billion and in 2009 $22.3 billion. In 2010, it will be zero.

Both taxes were repealed for 2010 by the Tax Relief Act of 2001, which gradually increased the amount exempted while increasing the minimum tax rate and lowering the highest rate. In 2001, $675,000 was exempt and the top tax rate was 55 percent. By 2009 the estate exemption was $3.5 million and the gift tax exemption $1 million, with a tax rate of 45 percent for everyone.

If Congress does not act this year, the estate and gift taxes for 2011 will be automatically set at a top tax rate of 55 percent with a $1 million exemption, and will stay that way unless changed by law.

Who shuttles the shuttle home

Who pilots the NASA 747 shuttle transporter when bringing the shuttle home piggyback?

NASA has two modified 747s that it uses to fly the shuttle piggyback to Florida when it has to land somewhere other than the Kennedy Space Center. These planes are called Shuttle Carrier Aircraft (SCA).

They are flown by a team of six specially trained pilots and four flight engineers. All are former military pilots who are qualified to fly several types of aircraft. Most are stationed at the Johnson Space Center in Houston.

These 747s are stripped down to accommodate the weight of the orbiter (about 175,000 pounds), which almost doubles the total weight carried. An SCA will typically use 20,000 pounds of fuel an hour. Carrying an orbiter, it will use 40,000 pounds of fuel an hour.

"It handles remarkably the same (as a normal 747)," SCA pilot Gordon Fullerton said in a story on NASA's website. "It's obvious (the orbiter) is up there, because there's a constant rumble that you can feel because of the wake of the orbiter hitting the vertical stabilizer of the 747." But other than long takeoff rolls and the need for some extra care in steep turns, "it's pretty much the same," he says.

Because they have to fly the shuttle home so seldom, the pilots keep their skills up by training twice a year on simulators owned by United Airlines.

Q&A: Government's income from estate, gift taxes 05/23/10 [Last modified: Saturday, May 22, 2010 12:13am]
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