The U.S. marginal tax rate is the highest in the world, and that is putting a big hit on small business, former Hewlett-Packard CEO Carly Fiorina said Tuesday.
Small businesses are what drive the U.S. economy and provide jobs, the CNBC contributor told Closing Bell.
"I would both lower the marginal rate and close the loopholes. It’s actually small business I’m worried about, not big business," she said of the tax rate on the last dollar of income earned.
While big business can "put their jobs and factories anywhere" to avoid paying high U.S. taxes, "net new job creation comes from small business, not large business" and more small businesses have been failing and fewer starting than at any time in the last 40 years," she said.
"So I worry about the health of our economy and the entrepreneurial health of this nation. If you talk to small businesses they say the tax code and the regulatory structure is not just that the rates are too high, but they can’t get through the complexity," she added. So besides lowering rates and closing loopholes the U.S. must "take a bunch of regulations off the books."
With Congress facing a "fiscal cliff" at year's end because of mandated tax increases and spending cuts to close the federal budget deficit, Fiorina said closing loopholes and exemptions would broaden the tax base and raise revenue.
She scoffed at the discussion over the "Buffett Rule," or a tax on millionaires backed by the Obama administration.
"All this debate about the Buffett Rule perhaps purposely misses the point," she said. "You can raise the tax rate on Warren Buffett all you want, but unless you close the loopholes and the exemptions Warren Buffett will still pay less than his secretary."
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