Tax season is upon us once again. As April 15th creeps closer, families and businesses are scrambling to meet the filing deadline for 2012 tax returns. For many that means a mountain of paperwork, hefty fees for tax preparation, and a headache from navigating the outdated, needlessly complex tax code. The U.S. tax code is so complicated that roughly 9 out of 10 Americans use paid professionals or commercial software to prepare their tax returns.
According to the Tax Foundation, in 2013, Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, equaling 29.4 percent of income. On April 18th, we will reach the national "Tax Freedom Day," which is the day Americans have finally earned enough to pay the nation's tax bill. This year, taxpayers will have to work more than three months to meet these obligations at federal, state, and local levels, pushing this milestone five days later than last year. For the Commonwealth, "Tax Freedom Day" will come on April 20th.
The growing tax burden resulting from the fiscal cliff deal in January and new taxes under Obamacare will continue to push taxes higher. High taxes not only impact families, but businesses as well. America's corporate tax rate remains at 35 percent, the highest in the industrialized world. More taxes mean less capital and less incentive to do business in the United States. The broken tax code should not stand in the way of our global competiveness and job creation in the United States.
As we prepare for Tax Day, it is a reminder that we must address tax reform now. In January, I introduced the Tax Code Termination Act. This legislation accomplishes two goals by repealing the entire tax code, except portions that deal with Social Security and Medicare, by December 31, 2017 and requiring Congress to approve a new federal tax system by July of the same year. Seventy-four bipartisan cosponsors have signed on in support of the bill. I will continue to promote this legislation to require Congress to finally debate fundamental tax reform.
Americans deserve tax reform. Higher taxes are not the solution to the debt problem. Instead, Congress must focus on keeping taxes low so individuals and businesses will be able to keep more of their hard-earned tax dollars. When we lower the tax burden, we encourage investment, job creation, and economic growth. More certainty and simplicity in the tax code would send a clear message to job creators that the United States is a good place for business.
If something is broken, it should be fixed. The tax code is no different. Now is the time for comprehensive tax reform that will reduce the tax burden and create a simpler, pro-growth tax code.