US President Donald Trump recently announced more details about his administration's tax reform plan. The Trump tax plan changes many parts of the current federal income taxation system.

The plan that Trump, National Economic Council director Gary Cohn, Treasury Secretary Steve Mnuchin, Senate majority leader Mitch McConnell, and House Speaker Paul Ryan collaborated aims to simplify the tax code and calls for "a fairer system that levels the playing field and extends economic opportunities to American workers, small businesses, and middle-income families." To help assuage economic inequality concerns, Trump told reporters that "the rich will not be gaining at all with this plan." However, a closer analysis calls into question the tax plan's implications on inequality.

Trump's plan proposes to change the top marginal individual tax rate from 39.6% to 35% and bottom rate from 10% to 12%. It has at least one middle bracket rate of 25% for unspecified incomes. It increases the standard deduction from $6,350 to $12,000, but removes personal exemptions. It removes most itemized deductions, including the state and local income tax deduction. It preserves the mortgage interest and charitable contributions deductions. It eliminates the alternative minimum tax. It would increase the child tax credit, making the first $1,000 refundable, and add a new non-child dependent credit.

In addition to personal income tax reform, Trump's plan eliminates the estate tax, which applies to inherited assets of at least $5.5 million. Also, the plan would lower the top corporate tax rate from 35% to 20% and create a 25% rate for pass-through business entities. It calls for eliminating some business deductions, including interest expenses. Finally, there would be a one-time repatriation tax of around 10% for corporations to bring home international profits.

The nonpartisan Tax Policy Center estimated that about 75% of the plan's tax savings will benefit the top 20% of earners. By the tenth year, 80% of savings will go to the top 1%. The plan is projected to reduce federal revenues and increase deficits by over $5 trillion over the next decade. Even with the overly optimistic $2 trillion extra growth cited by Mnuchin, based on the generous Laffer curve, the tax plan will greatly increase national debt.

However, it seems that Trump's tax proposal, like his three Obamacare repeal attempts, will die in Congress. Billionaires Warren Buffett and Larry Fink have criticized the plan. Senate minority leader Chuck Schumer (D-NY) and Finance Committee ranking member Ron Wyden (D-OR) have come out against it. Some Republicans are also wavering. Senator Rand Paul (R-KY) tweeted he was wary of supporting a tax hike on the middle class. Senator Bob Corker (R-TN) stated he could not support a bill that increases deficits. Ultraconservative House Freedom Caucus members spoke out against cutting the top marginal rates. Because Senate Republicans can afford to lose only two votes, it is likely that Democrats will be able to reject a tax plan that raises taxes on much of the working poor, middle class, and small businesses and gives windfalls to large corporations and the ultra-wealthy.