Inversions threaten to 'erode' tax base: CVS CEO

We need tax reform now: CVS CEO

Citing the widespread uptick in corporate tax inversions, CVS Health CEO Larry Merlo told CNBC on Wednesday "we need comprehensive corporate tax reform."

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A tax inversion is where an American company buys a foreign competitor, only to move its headquarters to that jurisdiction to avoid paying the 35 percent U.S. corporate tax rate.

"We are concerned that these tax inversions left unchecked will further erode the corporate tax base and make comprehensive reform that much challenging," Merlo said on "Squawk on the Street."

Merlo also noted that CVS, the nation's second-largest drugstore, pays roughly 1 percent of all corporate taxes in the U.S.

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To Jim Woolery, chairman-elect of law firm Cadwalader, Wickersham & Taft, "there will be more inversions" regardless of what action Washington takes.

Of course, changes to the tax code will "spook" some corporations, but there's another set of sophisticated companies with knowledge of global tax risk that will continue to find a way to sidestep the lofty U.S. corporate tax rate, Woolery said on "Squawk on the Street."

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"These companies will continue to invert ... and I want to point out that they're not inverting to an island; it's not Bermuda. This isn't the Cayman Islands," said Woolery, former co-head of JPMorgan's North American mergers and acquisitions business. "They're going to Canada, the U.K. [and] Ireland. These are very competitive, well-developed jurisdictions ... and our economy, and our tax structure is going to have to compete."

Still, concern is growing in Washington about inversions. President Barack Obama has criticized a "herd mentality" by companies seeking deals to escape U.S. corporate taxes.

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Of the 52 inversions and similar deals done since 1983, 22 have occurred since 2008, with 10 more being finalized and many more said to be in the works, Reuters reported. So far in 2014, several major companies have agreed to invert, including Medtronic and Burger King Worldwide.

—By CNBC's Drew Sandholm. Reuters contributed to this report.