If Washington really wants to help businesses, New York Mayor Michael Bloomberg says that politicians need to stop obsessing so much over tax rates.

When it comes to improving the business climate, "Usually the pundits think of this as lowering taxes," Bloomberg said in a Wednesday speech in downtown D.C. "But taxes are just one element of the environment — and usually not the most important. The first question most entrepreneurs ask is not can I afford the taxes — it's not that. It is: Who are my customers, and where do I need to be to serve them, and how do I get up and running  quickly?"

New York Mayor Michael Bloomberg’s definition of political independence is shaped by his unusual status as a multibillionaire. (Spencer Platt/Getty Images)

Bloomberg was addressing a ballroom full of bankers, corporate executives and financial analysts, with a guest list that ranged from JPMorgan to PriceWaterhouseCoopers to leading lobbyists such as Heather Podesta. But the audience at the luncheon—hosted by the Economic Club and MC-ed by the Carylye Group's David Rubinstein—seemed surprisingly receptive to Bloomberg's plea for Washington to move beyond the tax debate if they really wanted to help businesses.

"If the next president and the next Congress spend half as much time discussing how to help entrepreneurs as they've spent debating whether upper-income tax rates should be 35 or 39.6 percent, wed' be in a heck of a lot better shape," Bloomberg told the audience, which broke out into appreciative laughter.

"You show me a business person who cares about his federal tax rate more than his customers, and I'll show you Darwin at work," he added. The audience laughed even louder.

Instead, Bloomberg suggested that policymakers help businesses by reducing red tape and other obstacles, citing New York City's own efforts to "help  entrepreneurs connect to the capital and expertise they need to open and grow." He also criticized Washington for failing to make clear how "new, conflicting and incomprehensible regulations" are going to be interpreted.

In terms of the tax code, Bloomberg believes the answer is quite simple: Washington should just get on with passing a deficit reduction plan modeled on Bowles-Simpson. While he blamed both parties for the gridlock, the mayor insisted that Democrats "hold all the cards" when it comes to the fiscal cliff.

"They can just say to Republicans: 'All the Bush tax cuts on all income groups are expiring on December 31. You need us to stop it. Now, do you want to talk about spending cuts, and adopting comprehensive tax reform with a lower corporate tax rate or not?' " Bloomberg said. "And if Republicans are serious about spurring growth, they'll take the offer."

In the abstract, leaders of both parties would agree to that kind of grand bargain. Contra Bloomberg, it's not just pundits but Republicans who've insisted that rising tax rates will seriously hurt the business climate. And neither side is too optimistic that such a comprehensive deal can be reached any time soon, even if Washington manages to avert the fiscal cliff  Jan. 1.

It's just the latest manifestation of gridlock that's soured so much of the public on Congress. Does New York's mayor have any advice for the next generation of policy leaders? "My advice for people who want to go into government is, first become a billionaire, and then do it," Bloomberg concluded.