WASHINGTON -- President Donald Trump and congressional Republican leaders rolled out a proposal Wednesday to overhaul the U.S. tax code and cut taxes while eliminating a key deduction for New Jersey taxpayers.

Their proposal would end the ability of taxpayers to deduct the income and property taxes they pay to state and local governments, a blow to New Jersey with the nation's highest property taxes.

"Our view is the elimination of the state and local tax deduction is a $1.2 trillion federal revenue grab," said Matthew Chase, executive director of the National Association of Counties.

That revenue would help offset the costs of reducing the top tax bracket for those making more than $415,050 from 39.6 percent to 35 percent and shrinking seven tax brackets to three; increasing the standard deduction to $12,000 from $6,300 for individuals and to $24,000 from $12,600 for married couples filing jointly; and eliminating the tax on estates worth more than $5.4 million for individuals and $10.8 million for couples.

The Republican tax plan also would eliminate several other deductions and exemptions while keeping the tax breaks for mortgage interest and charitable contributions. It would reduce the corporate tax rate to 20 percent from 35 percent and tax small businesses at 25 percent; and allow companies to bring back profits from oversees at an even lower tax rate.

"Our country and our economy cannot take off like they should unless we dramatically reform America's outdated complex and extremely burdensome tax code," President Donald Trump said in a speech on taxes in Indianapolis. "The current tax system is a colossal barrier standing in the way of America's economic comeback."

The outline still has to be turned into actual legislation, and Trump said the House and Senate will write a bill that will "deliver more jobs, higher pay and lower taxes for middle class families, for the working men and women, and for businesses of all sizes."

Missing from the details released Wednesday is whether the tax package will increase the federal deficit, as did the earlier tax cuts championed by Presidents Ronald Reagan and George W. Bush. The bipartisan tax plan negotiated in 1986 by Reagan and congressional Democrats was revenue neutral.

The Committee for a Responsible Federal Budget, a research group, estimated that these latest tax cuts could add $2 trillion to the federal deficit.

Though opponents of the deduction have derided the state and local tax break as a sop to the wealthy, statistics show that a majority of the deduction actually flows to middle class taxpayers.

Of every $100 in state and local taxes deducted in 2015, $51.30 went to households making $200,000 or less, according to Internal Revenue Service statistics assembled by the Tax Foundation, a Washington research group.

More than three-fourths of those making between $100,000 and $200,000, 76 percent, claimed the deduction in 2015, according to the Government Finance Officers Association. It also was taken by 53 percent of those making between $75,000 and $100,000.

"The Republican tax proposal will hurt working families in New Jersey while piling on giveaways to a small number of extremely wealthy individuals," said Rep. Bill Pascrell Jr., D-9th Dist., a member of the House Ways and Means Committee that has jurisdiction over tax legislation.

Congressional Republicans plan to use same parliamentary maneuver they used in their failed attempt to repeal the Affordable Care Act, allowing them to prevent a Senate Democratic filibuster and thus avoiding the need to negotiate compromises with the minority party.

But the health care bill failed when the Senate GOP couldn't get a majority for legislation leaving more than 20 million additional Americans uninsured, there's no guarantee that House Republicans can get the votes needed for a tax plan that eliminates the state and local tax deduction.

More than 53 percent of taxpayers in the congressional districts represented by New Jersey Reps. Rodney Frelinghuysen, R-11th Dist., and Leonard Lance, R-7th Dist., take the deduction. That's more than any other district in the country except for one on Long Island, according to the Tax Policy Center, a research group.

"New Jersey taxpayers support federal initiatives more than any other state," Lance said. "The elimination of this deduction would further increase the disparity in New Jersey's support for the federal government versus the return in federal tax funds."

Treasury Secretary Steven Mnuchin said Sunday on CNN's "State of the Union" that the deduction meant high-tax states were being subsidized.

Actually, the opposite is true. New Jersey received just 38 cents for every $1 in federal taxes collected in 2015, paid, according to the consumer website WalletHub. New York received 56 cents.

"New York and New Jersey are donor states actually subsidizing low-tax states," Chase said. "Now New Jersey homeowners are going to pay even more to the federal government."

Chase's group is part of a coalition of organizations, Americans Against Double Taxation, that supports the deduction for state and local taxes. Other members include the National Governors Association, National League of Cities, National Association of Realtors and National Education Association.

While taking away a major tax break for the middle class, the Republican tax plan elminates the estate tax.

Trump told reporters before departing for Indianapolis that the estate tax repeal was "for farmers and people with small businesses" and offered "very little benefit for people of wealth."

Despite his claims, just 2 of 1,000 Americans are rich enough to pay the estate tax, including Trump, and more than 99 percent of those facing the estate tax in 2017 are wealthy individuals and families, according to the Center on Budget and Policy Priorities, a progressive research group.

Farmers and small business owners will account for only 50 of the 5,400 people subject to the estate tax in 2017, the center said.

"Instead of focusing on working families, the Republican tax reform plan is just another giveaway to billionaires and huge corporations," said Rep. Donald Norcross, D-1st Dist. "It fails the president's own 'Trump Test' to not benefit the wealthy."

Jonathan D. Salant may be reached at jsalant@njadvancemedia.com. Follow him on Twitter @JDSalant or on Facebook. Find NJ.com Politics on Facebook.