Sen. Ron Johnson Would Abolish The Tax Code

Sen. Ron Johnson, (R-WI), appeared on CNBC's Squawk Box on Thursday morning to discuss his outlook on the hearing and the current tax code. Johnson is one of members of the congressional subcommittee that heard testimonry from Apple AAPL CEO Tim Cook as he called for reform of U.S. corporate tax code.

"Apple is basically responsible for about 600,000 jobs, and that was a point that was pretty well made. When you can combine not only the tax they paid within America, but also their suppliers, and their supplier's employees, it probably totals $12 or $13 billion, while they created those 600,000 jobs," said Johnson.

"You know, the Department of Energy, as an example, just quietly released a report showing its green energy loan program: $26 billion worth of guaranteed loans, 2,300 jobs at a cost of, it'd be $11.5 million per job. So I guess I put my money behind the private sector versus the government."

Johnson noted that when you have a 35 percent corporate tax rate in the U.S., and Canada has a corporate tax rate of 15 percent, it's harder to compete even in North America.

"The question I ask, is if you're a global manager, and you want to invest in the North American market, are you going to go sign a plant in Toronto at 15 percent, or Detroit at 35 percent? It ends up being unfortunately a pretty easy decision.," said Johnson.

"We need, you know, a regulatory environment far less onerous. We need to make sure that our tax environment is competitive, and you know, the only point to be made is that, you know, Apple sells, you know, overseas, about 61 percent of its sales, claims about 65 percent of its income. That's a pretty close allocation. You start getting into transfer prices, and it gets very complex," said Johnson.

"We need to simplify our tax code. From my standpoint, I'd scrap the entire tax code. I would treat all corporate income as pass-through income. That's a way you could eliminate all of these issues."

While unlikely to pass, Johnson said lawmakers should talk about this strategy as a possibility because its incredibly pro-growth. He went on to say that there would be complications, but in the end it would be economically efficient.