instead, drug store cvs bought it, creating cvs caremark. its shares were up 2%, while competitor walgreen dropped 5%, dropping below $40 for the first time since march. and that's tonight's "market focus." >> tom: from swimming pools to ice cream shops, a huge section of the united states continues looking for ways to beat the record heat. between tomorrow and sunday, about two out of every three americans will be dealing with heat indices in the triple digits. millions of air conditioners have increased demand for electricity, but the price of a key fuel for that electricity has not boiled over. power utilities that have had to buy natural gas right away to meet spikes in demand this week have seen higher prices but, overall, natural gas futures are cheaper this summer compared to a year ago. rod krukro is chief editor of electricity for trade publisher platts. >> one reason is there was so much what they call demand disruption during the recession of 2008, and much of that has not returned. so the level at which consumers were demanding e

of caremark corporation the leading drugstore chains and providers. gentlemen, you probably know the rules statements will automatically be included in the record and we encourage you summarize your statements. about five or six minutes, and i also encourage you to be candid. life is short. let's make the most of this. ok? [laughter] >> all right. mr. duke, why don't you begin. >> chairman baucus, ranking member hatch, members of the committee, i appreciate the opportunity to testify today. we you are intelligently need modernize our tax code, and i thank you for taking on this issue. the ultimate outcome must be a strong, vibrant, job-creating u.s. economy. i hope all of you know your local wal-mart store back in your home state, but let me start with the company we run out of arkansas. every week we serve 106 million unique customers. about 1/3 of the u.s. population. the business model that has earned our customer's our customers' trust is we pass on sfravings our everyday low cost operations. last year wal-mart paid $4.7 billion in corporate taxes

. >> senator from the cvs caremark perspective acknowledging that we are a domestic company, this would help us accelerate in terms of bringing products and services to market faster, and in a more robust fashion. >> thank you. a quick ol follow-up question. mr. faulk, in your testimony, there's been proposals recently to november u.s. tax system further away from competitive global enormous. by ending deferral of u.s. tax on a company's foreign earnings, that's been -- this would burden u.s. companies with an even higher tax rate. seems to me we can't create the jobs we need if the tax code remains this way. can you comment object effect on your company and the economy and if there were a tax rate deduction that were significant enough, would that make the repeal of deferral acceptable? >> you're certainly right that it would add further complexity to the tax code and drive up the cost and would be viewed as anti-business by the larger multinationals. so the challenge would be how do we get a competitive global tax system with a competitive rate tied to a competitive rate that would se

i think today it is a penalty. >> and from the cvs caremark perspective, this would help us accelerate our investments as i acknowledged in terms of bringing products and services to market faster and in a more robust fashion. >> thank you. just a quick follow-up question. mr. falk, you note in your testimony that there have been proposals recently to, quote, move the u.s. tax system further away from competitive global norms, unquote, by ending deferral of u.s. tax on a u.s. company's foreign earnings. that's been a suggestion by some in this administration. now, this would actually burden u.s. companies with an even higher set -- even higher tax rate. it seems to me that we can't create the type of jobs that we desperately need if the tax code punishes companies that are headquarters here. would you comments further on the effect this would have on your company and on the u.s. economy and also, if there were an accompanying tax rate reduction, that were significant enough, would that make the repeal of deferral acceptable? >> well, you're certainly right that ending deeg feral would

for cvs caremark, a reduction in the corporate tax rate would specifically allow us to accelerate our investment in jobs and in our infrastructure. a return on our investments would benefit us all in the form of low wrote -- lower overall health-care costs and benefits for consumers. are effective income-tax rate is approximately 35%, and are combined federal and state effective income-tax rate is approximately 39% -- our combined federal and state effective income-tax rate is approximately 39%. we pay billions annually and more than $4.30 billion when similar state, local payroll, and other taxes are considered. we have the high effective tax rate for two principal reasons, the first being that many of the tax policies that help industry have limited application to us. secondly, we have consistently chosen to reinvest our earnings and create jobs here in the u.s. in order to continue to be successful in an increasingly global marketplace, we must control costs. we must raise capital. and we must officially reinvests earnings. and although we have worked hard managing our operations t

caremark is not necessarily in that category, do you say in your testimony you are paying almost an effective 35% rate. and in essence by paying a high effective rate seems to me that your company and others similarly situated is basically paying for the burden of loopholes and avoidance behaviors of other companies. so do you believe that aggressive use of avoidance methods by competitors or the ability of companies to be able to take their overseas earnings and convert them in to -- into tax benefits here at home that ultimately provide them with a much lower effective rate, and you still paying a higher effective rate is a fair set of competitive standards? >> i think it certainly does create some competitive challenges for us. acknowledging that we compete with domestic companies as well as foreign nationals. that have the opportunity to have a lower tax rate. i think that goes back to the theme of this hearing in terms of we support an overall corporate tax reform review that would reduce our overall rate. i would like to go back and just tag on to something that mr. duke mentioned about