. >> okay, mr. merlo? >> i agree there is no question of the comprehensive reform is going to have to be thoughtful and have a lot of elements to consider and just emphasize the point about predictability and certainty i think is a key by-product of the decision making process. >> on the repatriation life asked my staff to look into what happened in the last repatriation come in here is what the report to me. a number of empirical analyses have been undertaken to assess the use of the repatriated earnings and their impact on investment in u.s. growth and jobs. these studies found no evidence that firms used repatriated earnings to significantly increase domestic capital and investment, employment or research and development. rather earnings were used to benefit company's shareholders whose repurchasing programs even though this was explicitly prohibited by the measure. the memo goes on to say researchers also found specifically with regard to employment the number of firms repatriating funds actually reduc

. >> thank you very much, mr. merlo. i get the general feeling here in the congress that we clearly need to reform the corporate tax code and siege as well -- individual as well. on the individual side because there's so many compared to many years ago, and the reform generally today, you know, is lower the rate, broaden the base, move to territorial, and so forth. that's about as sort of the abstract of what needs to be done. the next level of questions though is if that's all pursued, to what level does that encourage more job growth in the u.s. rather than more job growth overseas. if the corporate rate is lower and the base is broadened, a lot of tax expenditures are eliminated, presumably profits are higher, and you can get more flexibility where you locate the plants and operations ect.. i think a lot of americans are thinking particularly with the unemployment rate so high, gee, that sounds nice, but what assurance do we have for the americans that as a consequence of it being changed, that more jobs are to be in

mr. merlo, i want to follow on what my colleague was i think referring to in terms of the repatriation of the profits and they understand that cvs caremark is not necessarily in that category but you do say in your testimony you are paying almost an effective 35% rate, and in essence, by paying a high effective rate it seems to be your company and others is basically paying for the burden of loopholes and avoidance behavior 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 into a tax benefits here at home that provide them with a much lower effective rate and you still pay a higher effective rate is a fair set of competitive standards? >> i think it does create 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 and i think it goes back to the theme of t

mr. thomas falk, chairman and ceo of kimberly clark, maker of paper products. next is gregory lang, the present ceo of semimanufacturing conductor company, and finally, larry merlo drugstore chain and provider. gentleman, you probably know the rules, custom practice here. statements automatically included in the record and encourage you to summarize your statements, about five to six minutes and encourage you to be candid. you know, life's short. [laughter] okay. [laughter] all right, richard duke, why don't you begin. >> i appreciate the opportunity to testify today. we urgently need to 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 a few words about the company that we run out of bentonville, arkansas. every week, we serve 106 million unique customers, about one-third of the u.s. population. the business model that earned our customers' trust is simple. we give them every day low prices by passing on savings from our every day low cost operations. last year, wal-mart paid $4.