. -- ani medtronic's matronics. ♪ >> if you've been to a disney theme park, you know his work.lt is a master of animatronics. caribbean toe chucky cheese. all that his 60,000 square-foot workshop in san bernardino, california. company while still in high school and has become the biggest name in the animatronics business. june, morea.m. in than 50 miners started digging for gold los angeles. despite the seven-day work week, you would never find a single nugget. ronics.re animat the miners started their workday los angeles.ng in it features a low-key appearance from one man who knows people will not recognize by his face or signature hawaiian shirt. this is garner hold. even though you won't see his name on the right, he built these miners. is almost like a magician. people look and stare in disbelief. wow, that's amazing. it's like three dimensional magic. my parents always wanted me to theyveterinarian until took me to disneyland. i remember walking through and seeing the pirates of the caribbean. how is it possible that these things looked like real people? that moment that w

. >> my question relates to medtronic who just acquired providian? think this is due to just medtronic getting some tax relief from our government? >> no, because we've liked covidian more than medtronic. however, st. jude med is in that single category and i need to go to matt in virginia. matt? >> mr. cramer, absolutely love the show. rough couple of days for old republic international, ori. what do you think? >> you know what? i like that yield and long term i like the company and the business has gotten harder and they missed the quarter, but you know what? if you want to take pain between now and the next quarter i think you'll be okay. not a great recommendation, but they did miss quarter. let's go to tommy in maryland, tommy? >> boo-yah, jim, tommy here. >> how are you? >> great, great, my question is about right aid and with the change in the, kr fo bringing in the guy, what do you think? >> look, i still very much believe in right aid. i have to tell you that i understand that it's been going, along, it's churning right now and it had a very

jude on "mad money," major medtronic competitor.s covidien, gets advantage of the lower tax rate. i have to ask dan starks are you un-farley disadvantaged because of the medtronic tax rate? i think that's a legitimate question to ask. >> without a doubt. what do you do about it? you're competing against a number of your key competitors who -- look at valeant. the tax rate will live on forever as one of the greatest single benefits. >> are you joining the allergan people saying negative things about valeant and therefore saying unfair things because you say negative things? that's the story this morning that they talk, right? >> i'll come back to allergan in a minute. >> we have bill ackman on the judge wapner show and he's going to slag pie opyott. it's a slag fast. we had a love fest, right, with act mba and icahn. we'll have a slag fest on wapner's show. you don't like that in. >> no, i think you may be right. >> we need you in promotions. >> i can deliver these things. >> i know. >> i can write ad copy. >> dow down almost 80 poin

medtronic works to improve its position with the -- by becoming a nonu.s.-based company. that. we'll continue to be a u.s.-based company, but we'll continue to work through the appropriate channels to -- to help develop u.s. corporate tax policy that makes more sense and increases the number of jobs we can help create here in the united states that helps us continue to improve the volume of exports where one of the leading exporters, the medical device industry in the united states is one of the leading export industries. the last number i saw, the favorable balance of trading to the tune of about $46 billion not an industry that should be penalized with high taxes the excise tax. >> i totally agree with you. dan said the same thing the secretary of treasury last week, i want to thank you so much. i think the company looks terrific for 2015, which is the way our investors should be thinking about. thank you so much, dan starks, chairman, president and c ceo of st. jude medical. thank you for coming on. >> thank you. >> people don't think about the next month. think about

abbott, medtronic, destination maternity.atalyst that gets tax reform gone? >> the pace of these inversions is speeding up and i think one of the reasons it's happening, companies don't want to do this. companies don't want to make these changes. and many of them are holding out for the hope we were going to have comprehensive tax reform, which it looked in the past couple years like we might have. and remember, that the white house did put out kind of a broad blueprint for tax reform. more importantly, senator backe at the finance committee and chairman camp. people looking at this thought we would reform the tax code as part of an overall budget deal and deal with noncompetitive measures. now that it's slowed down and in many ways slowed down because washington can't get anything done right now, i think these companies are probably giving up hope and saying if we can't wait for tax reform, maybe we have to look at this other restructuring. i think it is actually very likely to put a lot of pressure on changing the corporate

looking at the spread in the abby shire deal, and the spread in the covidian medtronic deal.e significant. covidian at over $8, and look at that. >> wow. >> and these are two of the largest transactions of the year, and inversions where medtronic will become, and a abbvie will become foreign to say the least, but talking about inversions and the president of our own network has pushed some people to the sidelines and said we won't take our chances with the idea that you will get something retroactive and that being said, most people i speak to think it is a 5% chance, jim, that you get any legislation or anything that would really stop these deals. >> no, you are not going to stop them, and i think that everyone wants comprehensive tax reform, and that is not going to happen, and it is game on. it is game-on. and i think that people who want to say that the president who talked tough last week with steve liesman can play a role, but the only thing they could do is that the irs issues a ruling saying we are not going to let this happen anymore because the irs has that power, b

by purchasing a london based astra zeneca and companies like minneapolis based medtronic send pennsylvania based mylan have announced plans to move their legal addresses outside of the us as well inversions u.s. based companies purchase a foreign company and then switch the legal address to take advantage of the foreign jurisdictions more favorable tax laws however in many cases the companies executive team remains in the u.s. the obama administration has proposed an initiative that would make it effectively impossible for a u.s. based company to purchase a smaller foreign competitor simply to take advantage of that organization's address the proposal would save seventeen billion dollars over the next decade according to the administration so it's not peanuts now j.p. morgan c.e.o. jamie dimon has weighed in on the issue as well. saying he's very much ok with companies using tax avoidance tactics if it's done in the name of serving investors and saving them tens of billions of dollars he said the real problem is that the tax code is just too complicated and it's not c.e.o.'s trying to shir

bend over backwards trying to avoid paying taxes we just had a merger in the united states where medtronic merged with covidien and now they relocated to arlington there avoiding taxes in the us the same deal with the big drug companies pfizer and astra zeneca here they do this the reverse takeover especially for a huge tax benefit it's terrible as much money as they're making for the multimillionaire and billionaires show hold those they're still not happy they want more as anyone from the activist community reaching out and want you to be with them in other words. the international or green baize or u.k. uncut or these any of these groups they read are they calling up or contacting and say ronnie white to come speak at our vet because you're talking as an activist now even though you're the top stop picker in the world are they reaching out to you yes i'm getting calls from whistleblower organizations and socially conscious you know funds and i've gotten hundreds and hundreds of messages in the last few weeks and i'll finally have a chance to sort through them when i get back to miami in

. >> i don't know if nixon would have ordered medtronic surveillance, but he would have been in the linere at that point. it is not true, based on everything i can find in the tapes, and the nuance of conversations, that he had anything to do with watergate per se. >> what about the 18 minutes of tape? >> the media loves that question. i put a portion in the book just for that. it is not a question that really changes history. there are so many other sources. >> we don't know what would happen. >> well, we do know. i was able to narrow down to five people who had access to that equipment, that tape at the given time the erasure clearly happened. i don't know which of the five. i wasn't as interested in that. i want to know what they erased. >> and history with like to know. >> that is clear, for this reason. nixon sets up his final defense, which is the fact that he knew nothing of the watergate cover-up before march the first. -- 21st. after he sets that defense up it is the discovery of the 18.5 minute gap that appears. what it clearly is, june 20th, conversation of a subpoena they hav

states you get a credit equal to the tax that you paid, and when i had this long conversation with medtronicthey were trying to convince me of a variety of things. they showed of the money offshore that they paid a rate of 5% to 10%. it's absurdly low. >> is there something, though. there is nothing illegal in any of this. >> this gets very technical, and we don't want our audience to fall asleep. >> i can do me on my own. >> you don't need me for that. you have to give me a sleeping bonus. there is a piece of legislation running around that i think unfortunately obama's efforts have now made less likely to get passed that would make technical changes that would stop the inversions dead for a while, and then in theory if did you this right you would stop them dead and the stampede and it's retroactive, and then you could do something about the tax code and figure out where you are. i hope some of this happens. i don't know if it was. i hope it will. >> we talked about medtroni, walgreen's a little bit. tell me about michael core's the cruise company. >> i get confused. we chose at the fortun

announced plans to reincorporate overseas, a quick check on their stock today, down a percent for medtronicabs down three quarters of a percent. imagine speaking of healthcare, over-the-counter pain medication-- think aspirin or ibuprofen, but not any pill form form that gets stuck if you don't have water with you, but a powder form. instant allergy really, how about that it's in the dissolved in your mouth. how about carrying around pepto-bismol in a powder pack in your pocket. the future is here. it's urgent rx, a startup that takes popular over-the-counter drugs and makes them into flavored powders that you can carry and take wherever you go, no glass of water required. company founder and president jordan eisenberg is here for an exclusive interview for our start up nation series. jordan, you're kind of everywhere right now. >> we are in crane creek, walmart, all of the vegas gift shops in grocery stores in every city. liz: and you could be in people's wallets. >> absolutely. liz: very thin product. they come in these and you up all kinds different products. exactly what is this? you ca

which i quita brands and medtronic are in pending mergers that would relocate their tax bases to irelands is also said to be considering a deal to bring it under switzerland's taxing authority. of course, all of this is costing america a lot of tax revenue. the government wants to do all it can to close these tax inversion loop holes, which could cost uncle same billions of dollars over thing years. >> let's bring in meg tirrell and dom which you to discuss it more. we also want to know what you think, and let us know how you feel. meg, why so many of these dials in the pharmaceutical and medical device area? >> it's totally fascinating. really i think it comes down to a domino effect. once one company starts to do this, it makes assets scarcer, and also makes it hard to compete. valiant which has a low tax rate, they can buy something and it can be cheaper for them. so then competitors are starting to do it, and it's really starting to escalate. >> speak of domino, dom chu, why are these things as to happening now? this situation existed before this spring, and yet this spring and summe

medtronics' proposed merger was record breaking when it was announced in june. but the ink in the record books had barely dried when abv announced its intention on friday to require shyer for almost $55 billion. according to the july 15 edition of marketplace -- and i'm going to quote here -- what's going on now is a feeding frenzy. every investment banker now has a slide deck that they're taking to any possible company and saying, you have to do a corporate inversion now because if you don't, your competitors will. the congress has been aware of the inversion problem. the underlying sickness continues to gnaw away at our economy with increasing intensity. the american tax code is an anti-competitive mess. accountants, lawyers and fast buck artists looking for tax shelters feed off it. this mess is driving american investment dollars overseas, and according to the joint committee on taxation, it is costing american taxpayers billions. on a bipartisan basis, the finance committee must respond now. the in verversion loophole need be plugged now. second, let's use

are setting a record pace, nine deals have already been agreed to this year by companies including medtronic and chiquita brands. overseas cash piling are growing and now estimated to be about $1 trillion. companies don't want to bring that money back to the united states and face a 35% corporate tax rate here. u.s. ceos have increasingly been calling for changes. >> the current u.s. tax system puts u.s. companies at a disadvantage relative to ous competitors. that's a simple fact. i think some of the companies acting on these inversions and doing these inversions are simply trying to level the playing field. if we've got a concern about inversions, we need to tackle our tax code. >> on the flip side, fear that washington will act to top inversions has helped accelerate m&a. the new proposals are already on the table. already, though, since 1983, an estimated 76 companies have left the u.s. for greener tax pastures. tyler, back to you. >> that tax inversion debate will be a hot topic when cnbc's steve leesman interviews the president later today. it's a special cnbc program. we will spend al

medtronics' proposed merger was record breaking when it was announced in june. but the ink in the record books had barely dried when abv announced its intention on friday to require shyer for almost $55 billion. according to the july 15 edition of marketplace -- and i'm going to quote here -- what's going on now is a feeding frenzy. every investment banker now has a slide deck that they're taking to any possible company and saying, you have to do a corporate inversion now because if you don't your competitors will. the congress has been aware of the inversion problem. the underlying sickness continues to gnaw away at our economy with increasing intensity. the american tax code is an anti-competitive mess. accountants, lawyers and fast buck artists looking for tax shelters feed off it. this mess is driving american investment dollars overseas and according to the joint committee on taxation, it is costing american taxpayers billions. on a bipartisan basis the finance committee must respond now. the in verseversion loophole needs to be plugged now. second let's us

medtronic is looking to avoid paying higher u.s. taxes as well.lew says there's nothing wrong with cross-border merger activity and the economy is stronger for an investment overseas and for foreign investment in the united states as well, but he stresses economic efficiency not tax savings should be the issue. and he says he hopes that congress will pass anti-inversion legislation as soon as possible. also remember, for legislation to be effective, lew says it must be retroactive. and while lew says closing the loophole is no answer to comprehensive tax reform, he says it's a necessary step toward the path for an efficient tax system. >>> tech is the talk of the up to. we'll take a look at the key corporate reports coming up this week right after the break. stay with us. >>> let's take a look at one of today's top stories. israel has ended a humanitarian cease-fire in gaza saying they are ending incessant rocket fire from hamas. in a statement from military sources, israel said they want to stop attacks on gaza say they are focusing on tunnel net

. >> and medtronic as well. is there a regulatory risk? next administration will address taxes and tax inversions. those who have put in place have a great platform to make more deals. >> thank you for joining us, chairman and ceo of mg sass. not everybody in the literary world is siding with traditional publishers over amazon. we meet an amazon published author. he loves working with amazon more than any new york publisher. ♪ >> back to the big breaking news about rupert murdoch making a bid for time warner. jeff bewkes, the ceo of the company. by thed was rejected time warner board. this is still in play here, who else could make this bid? joining us now is david, his world" detailss the life and times of murdoch's family. this is as much a corporate story as it is about rupert murdoch the man and how he wants to cement his legacy in the media world. >> he wants a final eraseer to blur and questions about the hacking tainting hise u.k. legacy. this would be able to move. think of it akin to the dow jones takeover in 2000 745 $.5 billion.

to some extent about medtronic in my article.and i am sureg, that it is too low, this would cost ultimately $60 billion for picking up the tab for its executives and directors excise tax. that is what this is. this is something that seemed like a great idea but it doesn't work. charlie, arkansas, independent caller. i just wanted to say bob of believe. knoxville, tennessee, independent caller. myler: thank you for taking call. it is my opinion that the have an companies problem and of themselves. as opposed to those countries just -- companies being un-american it is the historically un-american tax policies. historically going back to the founding of the country, that would be my assertion. if americans acting in response to what they perceive as inessive taxation is acting an un-american way, i suppose that mr. sloan would have to describe the founders of the country who fought the revolutionary war as being un-american as well. guest: all right, again, forgive me for -- i don't mean to insult you, i don't think you mean to ins

. >> including medtronic, and abbvie, fourth one yesterday, another inversion.s is not a huge deal, but important. keep any on it. why? well, it's not just an inversion buying a company that's already domiciled or in a lower tax jurisdictio jurisdictions. they are actually buying assets, really, asset drop down or carve out from an italian company, s cosmo contributing assets, and salix issues shares to cosmo, and by the way, the shares are looking down as you see because of the concern about the delusion from the deal in terms of what price they pay, and salix will reincooperate with the subsidiary from the italian company in ireland. why not? 12.5% tax rate. as we said many times, you still pay u.s. taxes on whatever earnings are derived in the u.s. what happens with the inversions is that over time, when you do inversion, the earnings stream will tend to increase more and more from the redomiciled company, from where it is redomiciled, and there are different things companies can do in terms of the use of inner company notice, for example, that move earnings

the drop down, asset drop down deal, salix, medtronic, another one. they are all out there.oming. now, you know, we've spoken suchb about inversions, jim, forget about apple reporting today. we forget about ip, another way to avoid u.s. taxes, and, in fact, amounts to larger dollar amount. royalty streams go to ireland. the move to intellectual property of foreign domiciles, even u.s. corporations that are u.s. taxpayers, they generate overseas cash because they move the right p, not because they sell a lot over there. >> it's an unfair system. we have the highest corporate tax rates in the world, but that also -- there's a lot of corporate tax lawyers out there finding ways to cut the bill. guys with the best corporate tax lawyers win. when i spoke with st. jude, competing against med tronic, he said it's unfair. >> right. >> we play by the american rulerule rules. >> the key thing, the competitive advantage conferred among the companies who make the move, not because of what they generate in the u.s. is not taxed at the u.s. rate, but they have access to overseas catch on

. >> medtronic covidien often cited as being a fantastic deal, two great companies.fizer downgrade today. we saw -- i tell you, some big cap drug companies, pfizer, glaxosmithkline -- >> all reporting this week, by the way. >> tide turned against these guys in terms of research. but i do believe that when you look at -- i interviewed st. jude med a fine company, sensing it's unfair in their own cohort. >> but they have to figure something out. i noted that small deal a few weeks ago, because it was this spin version, is what they call it asset dropdown, now two more times with mylan, the abbott labs subsid dears why potentially the hospira deal with danone. they're like, they don't feel great about. to generate enormous profits from the sale because you have anxious companies willing to do an inversion. >> did you respond to cuban's tweet, any company that does this, i'm selling your stock immediately. >> i'm responding the business is to try to get rich, one of the things i've thought about mark, i've known mark since the '80s, cubans wants people to be wealthy. one

medtronic with cavidien was record-breaking when it was announced in june. but the ink in the record books had barely dried when abbvie had announced on friday to acquire shire for almost $55 billion. according to the july 15th edition of "marketplace" and i'm going to quote here, what's going on now is a feeding frenzy. every investment banker now has a slide deck that they're taking to any possible company and saying you have to do a corporate inversion now, because if you don't, your competitors will. the congress has been aware of the add version virus for a long time. in fact, it passed legislation purporting to solve the problem a decade ago. but the underlying sickness continues to gnaw away at our economy with increasing intensity. the american tax code is an anti-competitive mess. accountants, lawyers and fast-buck artists looking for tax shelters seed off of it. this mess is driving american investment dollars overseas. and according to the joint committee on taxation, it is costing american taxpayers billions. on a bipartisan basis, the finance ec

. >> i thought it was interesting in the medtronic deal. there's a clause.ng clauses in many deals that say, look, if they change the law, obviously, retroactive, the deal could be off. what worries me is that there's a lot of companies that want to game washington and think washington's dysfunctional that it's worth taking the risk on comprehensive tax reform. >> jim, i think if you look at the letter i wrote, it has very much the case for bipartisan business tax reform, recognizes we might not get it dope quickly. this is the issue that there ought to be bipartisan consensus on. i don't know anyone who wants to defend the idea of u.s. companies moving their nominal ownership in a way to avoid u.s. tax laws, and we ought to be able to get bipartisan consensus on that. there's been a range of issues where you can still in the difficult circumstances in washington get things done. my letter was to the democrats and republicans who lead the finance of the ways and means committee, and i look forward to working with them and think we can get this done. >> you u

chiquita, applied materials, medtronic, abbvie, all -- >> would you have to undo those deals? they wouldn't get the tax inversion -- >> the tax benefits would go away. >> and some of these deals have pauses in the merger agreements that say if the laws change we have the right to pull back. >> anyway, hypothetical discussion because "a" it's not going to happen. "b" it's not going to happen with a retrospective -- >> let me switch gears to two other topics. family dollar this morning. on that transaction, we had an analyst come on about 6:30 right after the deal was announced and say is the price fair? we do know that the nelson peltz and everybody's voting or says they're voting in favor of it. the analysts suggested the bryce may still be too low. can you imagine shareholders coming out? >> hard to see given the way things have played out -- >> and you have both stocks up. >> certainly. and listen, activist investing, this is another win on their store card. it's just extraordinary the track record they've had over the last several years. dollar general was the other likely

bheengsed abbvie, medtronic, but on and on. there are some companies in here from the state of ohio. there is a company listed there from my home state of ohio that chose to go incorporate somewhere else because of the tax code, and guess what? they're going to save about $160 million on their tax bill this year. that's a pretty darn good savings, and that's wrong. we've got to reform this tax code. in 1960, 17 of the world's largest 20 companies were in the u.s. u.s.-headquartered. by 2006, only six were headquartered in the united states. in 2012 alone, our global 500 companies, the bigger companies, our share fell from 36% to 26%. i'm not saying it is all due to taxes, but a lot of it is. if you talk to these company, you find that o out. anything anyone disputes in the united states senate or in the white house, for that market that tax reform is needed. i don't think so. and yet we aren't seeing it. instead we're hearing about these small things that seem politically popular but aren't going to make any difference in terms