http://legacy.library.ucsf.edu/tid/deg12a00/pdf

employment and a positive
contribution to our balance of
payments. Employment in the U .S .
in support of our international
activities increased more than 300%
during this period . We sincerely hope
that Congress will examine the
record carefully before imposing any
counter productive measures.
In 1972, five states and the District
of Columbia raised or passed
legislation approving increases in
cigarette excise taxes ; this compares
with 16 state increases in 1971 .
Unfortunately, we cannotrealistically
expect the number of future tax
increases to remain at or close to the
1972 level :
In fiscal 1972, total cigarette excise
tax revenues came to $5 .2 billion, an
amount almost 50% greater than the
combined revenues from cigarette
sales of the six domestic manufacturers
(excluding federal excise tax) . This
total was composed of $2 .l~billion in
federal excise taxes, $3 .0 billion at
the state level, and $ .1 billion at the
municipal!and county levels .
It is an accepted fact that the excise
tax, like the sales tax, is a regressive
form of taxation in that a larger
proportion of lower ineomes are
absorbed by each dollar of such a tax .
It has been documented that excise
taxes activelydiscriminate against
poor urban dwellers who tend to
smoke greater numbers of cigarettes .
In many instances, excise tax
increases have beenatdeastpartially
self-defeating. In New York City
where the "tar" tax was added to
substantial existing excise taxes, the
number of cigarettes taxed continued
to decline . In 1972, the number of
cigarettes taxed declined below the
level taxed in 1965: While actual tax
revenues have increased marginally,
legal cigarette sales are being
diverted from New York City or are
being displaced by bootlegged
http://legacy.library.ucsf.edu/tid/deg12a00/pdf
Social Responsibilit y
In late 1979, Philip Morris initiated
a company-wide audinof its
practices in the areas which fall
under the heading of "corporate
responsibility" in an effort to
determine whether manacement
policies and directives were, in fact,
being carried out-and'to whatextent.
and where . Requiring nearly a year,
the findings have helped'establish
bench marks and directions for
future management action at
corporate, operating company, and'
individ'ualiplant levels.
In Oetobea our overall corporate
program received favorable
recoenition in a reportenutled
"Initiatives in Corporate
Responsibility," prepared and
published by the Consumer
Subcommittee of the U .S . Senate
Committee on Commerce under the
chairmanship of Senator Frank E .
Moss, of Utah . This Senate Commerce
Committee report, which surveyed
300 of the top corporations on the
Fortune "500" list, referred to " . . .
an outstanding report submitted by
Philip Morris . _ . "
During 1972, responsibility for
reviewing ourcontinuing programs in
these areas, and for initiating new
programs, was assigned to two new
committees of our Board of Directors
-the Environmental Committe e
and the Corporate Committee on
Social Responsibility and
Contributions . These committees
were created to ensure that our
programs and performance are
progressive and productive . The goals
that we have been pursuing include
recruitmentofwomen, minorities,
and veterans, advancement of equal
opportunities for minorities and
women4 increased business with
minority-0wned institutions, on-thejob
training, significant involvement
in both community affairs and the
arts, and substantial reduction or
oftabor, will represent a significant
educational experiment in time to
come .
In 1972, Miller completed its
conversion to fully recyclable,
aluminum beer cans, while Formosa
Sprin_'s and Nicolet Papens effluent
control programs became fufly,
operational . Mission Viejo's efforts to
preserve and enhance the environment
durinc and afterhome construction
proved highly successful .
In 1972, your Board was saddened by
the death of Dr. Jess H. Davis,
President of the Stevens Institute of
Technology. We shall miss his
wisdom and dedication . .
The Board was subsequently
strengthened by the election as
Directors of Mrs. Whitney M .
Young . Jr ., w idowof the late civili
rights leader, and Mr. John T.
Landry, Vice President of Philip
Morris Incorporated and Group Vice
President-Director of Marketing,
Philip Morris U1S.A .
We are optimistic about Philip
Morris's future-in 1973 and the
years beyond . Our record of growth
in the cigarette business, in the U .S.
and world-wide, is well known .
Given the vitality and momentum of
our cigarette brandsthroughoutthe
worldJ there is every reason to
believe thatour cigarette growth will,
continue . We also believe there is
great future potential in the brewing;
industriall and housing areas of
our business .
For their dedicated contributions to
our continuing growth, we are grateful
to all our 33,000 Philip Morris
employees in this country and'around
the world, and we thank them for
their outstanding performance .
Respectfully sub'mtined on behiltof
the Board of Directors ,