American companies may not seek so-called tax inversions, which have drawn the ire of the Obama administration, if the government passes reforms friendlier to business, Merck CEO Kenneth Frazier contended Wednesday.
Merck's pharmaceutical peers, Pfizer and Ireland-based Allergan, scrapped a $160 billion merger Wednesday after the U.S. Treasury Department issued new rules to deter inversions. With such deals, U.S. companies aim to pay lower rates by acquiring a foreign company and moving their tax addresses.
Frazier argued that the government should not address inversions themselves, but the taxation concerns that drive companies to seek the deals.
"It's really important to recognize why companies seek to do tax inversions, and that is the current U.S. system of taxation makes U.S. companies simply uncompetitive," Frazier told CNBC's "Closing Bell."