1. The Millers, a family of four (with two young child) filing a joint tax return, have the following information to prepare their federal income tax return: AGI: 112,000, Taxable income= 86,000, taxed owed=13,800, tax rate 30%, average tax rate= 12.32%. 2. Suppose the progressive personal income tax in the previous question is replaced by a flat (or proportional) tax, structured as followed: a) There is a standard deduction of $25,000 for a single taxpayer and $50,000 for a couple filing jointly. No itemized deduction is allowed, and no tax credits are allowed. No further exemptions, deductions, exclusions and adjustments are allowed. b) All taxable income is taxed at 20%. Please answer the following questions: (4 points) A) Under this flat tax, how much will each of the two families, making $75,000 and $150,000, pay in tax? (1) B) Is a flat tax designed this way still a progressive tax? (1) (Hint, try to measure progressivity by the average rate. Since there is no adjustment, adjusted gross income is the same as gross income.) C) Which tax system do you think is better? The progressive tax or the flat tax? Please use the two principles of efficiency and equity to