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2. There are three categories of income tax filters in the United States: those who never evade taxes, those who occasionally do, and those who

image text in transcribed 2. There are three categories of income tax filters in the United States: those who never evade taxes, those who occasionally do, and those who always do. An examination of audited tax returns from one year to the next shows that of those who did not evade taxes last year, 95% will remain in the same category this year; 4% will move to the "sometimes" category, and the rest will move to the "always" category. For those who sometimes evade taxes, 6% will move to "never," 90% will stay the same, and 4% will move to "always." As far as "always" evaders are concerned, the respective percentages are 0.10 and 90% a) Express the problem as a Markov chain b) In the long run, what would be the percentages of the tax evasion categories of "never," "sometimes," and "always"? c) Statistics show that a taxpayer in the "sometimes" category of tax evasion represents an amount of $5,000 per return and in the "always" category, the amount is $12,000. Assuming the taxpayer population is 70 million and the average income tax rate is 12%, determine the annual reduction in taxes collected due to evasion

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