Imagine the country is made up of 100 households. The federal government needs to collect $800,000 in income taxes to be able to function. The population consists of 6

groups:

• Group A: 20 households that earn $12,000 each

Group B: 20 households that earn $29.000 each

• Group C: 20 households that earn $50,000 each

Group D: 20 households that earn $79.000 each

• Group E: 15 households that earn $129.000 each

Group F: 5 households that earn $295,000 each

This scenario is roughly proportional to the actual United States population and tax

needs. We'll consider a modified flat-tax plan, where everyone only pays taxes on

any income over $20,000. So, Everyone in group A will pay no taxes. Everyone in