Question 2 (15 points) The Millers, a family of three filing joint returns, have the following information to prepare their federal income tax. 65,000 1,000 1,500 800 750 Salaries Interest income, corporate bonds Interest income, municipal bonds State and local income taxes Real estate taxes General sales taxes Home mortgage interest Credit card interest Cash contributions to charities Interest on education loans Hospital and doctor expenses 750 3,350 500 250 500 1,500 13 November 2019 Page 1 of 4 SPEA-V 372 Government Finance and Budgets Fall 2019 In class, we have seen that the personal exemptions are suspended until 2025. What I want you to do in this exercise is to compare the situation pre- and post- the new tax legislation. Do not worry about inflation for this exercise. In 2017, the standard deduction was $12,700. The personal exemption was $4,050 per person. In 2018, the standard deduction was $24,000. Personal exemptions were $0. For both years, find the respective tax brackets for joint filings and compute the following: 1. Adjusted gross income 2. Taxable income 3. Average tax rate 4. Effective tax rate 5. Marginal tax rate In which year is the family better off? Please support your answers with numbers