Tobacco Documents Online

Trade Names Richmond, Va. NEWS-LEADER December 18, 1967 Tobacco Man Flies Into Hurricane i By TYLER WHITLEY Business Editor Literally a n d figuratively, William A, O'Flaherty has been flying into the eye of a h'urri- cane for a good part of his working life. As a Navy pilot, he was a member of the "Hurricane Hunters" flight squadron that' mapped the progress of hurri- canes before weather satellites came along to do~the job: Fly- ing into a hurricane, he recalls, was so bad that his plane would go in painted blue and come out'silver, the paint removed;. In 1956 0'Flahertv left the Navyy and stepped into ahur- ricanea of another sort - the mounting.criticism against the tobacco industry and the at- tempts by various government- al'; groups to put everrhigher taxes on cigarettes. The latter type of hurricane may be harder to cope with than the former. 0'Plahertv only had to map the natural hurricanes: he didn't have to tame them. TAX COUNCIL O'Flaherty is executive direc- tor of'..the. Tobacco Tax Council,. Inc., a trade association cotn, posed of various segments of: the tobacco industry, including manufacturers, retail sellers, wii o I e s a.l e distributors and growers and'.warehawsemen. The purpose otf the associa- tion is to hold down the excise taxes on cicarettesand other tobacco prnducts. The total take from.taxes on tobacco at thefederal, state andd local levels ts. about $3.8 billion a year, O'Flaherty pointed out:. 0'Flaherty notes that this year 44 state legislatures met and 32 of them sought to in- crease the state . tax on cigar. ettes.. Ten states raised taxes and the tax bills were defeated In thee other 2:.. states. T'wenty- ftve state leeislatureswdi meeU Ih 1968 and 17 or 18 of' ihem~ will consider provsals to ra se taxes on cigareec^s; U Flaherty said. BELIES HARD SELL 0'F19hertv, x ho ~tands a burly, 6~feer, lour inches tall, Is a folksy; silver-th'atched man of 40 who speaks of his trade vnn, -euW: A. O'FLAHERTY DIRECTS TOBACCO TAX COUNCIL He Thinks Cigarettes Are Taxed Too Highly association and itsprob4emss in BASEDON. FACT • a low-keyed!manner that belies "Ours is not an emotional'l the hard sell activity of his appeal but an appeal based on association. fr.ct,"he said. "Wee knoww that From the h'eadquar2ers, at high cigarette taxes result in 5407 Patterson Ave. a staff of lower sales." eight turns outt ani amazingly^ He is concerned by the large volumee of statisncall in- I thought thatt some anti-smoking formation, researchr e.p o r t s; interests are seeking to tax and monthlvbulletins. ' cigarettes not for revenue.rea- The TobaccoTax Council son but as a punitive matten was estatihstied in1919. to com- i "We feel like.th'ee anti-tohacco pilee thisinformauan regardtnt;, peoplee wantt to punish the to- federal, state and local es- bacco.industry,," he declared. cise.taxes.on~tohacco productss and to furnish it to the indus- tryy andd to the pabhn: 0'Flahertvsews u•r or"m+ zation does Ii ttlc ac,ua l lobbvine before gavernmental !iothes: Most~of its cnrk is a; an "rx- pert w;tn~s5," he c:ud- whenthe cn,mrd t; callydd in hya statee group Itn. testity atL a leg- istauve se,sion. Hee citedd the case of New. York City, wh'ich impocad a tax nf211oents a pack on ne:arettes in Anrul of 1965 Asthetnx council cnrrectly predicted, •dles ih~. ti'ew, yhrk state dropped IS~percent'.while salestn the city ttself are down 24 per cent. "You can price oiGarettes out of the rrarketl"' n•('hhertysaid, inhaling deeplyt on, a cigarette. POOR MAN3 LUXURY "Cigarettes have pretty well' been a poor manSs luxury." he added: "Most anyone could af- ford to buy and enjoy them,'." New York City is losing 920 m+lfron annually in revenues from the sale of cigarettes be- cause of its high tax, he said. The Tobacco Tax Councillre- cently published a research~re port that found that in 23 states where taxes on cigarettes were increased in 1965 sales per pack declined 3:11 per cent between 1964-65 and 1966-67 . In the 26 states whose rates were not in, creased sales rose 3.! Den cent. Because of Its uaiforlie size and shape and relatively fow cost, a cigarette pack is easily taxed by state legislatures, O'Flaherty pointed out. So much so ~ in fact, that "people have lost all, feelinq for what cigarettes actually cost,'," he said. - Without taxes, a clgarette pack coutd'~ sell for 11, to 12 cents, he said, and everyone would make the same profit' on the sale as they do nor. There is an 8 cents federal ex- cise tax on each pack, he point- ed out. 0'Flaherty emphasized that the Tobacco Tax Council does not seek to remove all' taxess from cigarettes. "No one has ever said thatt cigarettes shouldn't be taxed," he saidl What the counciliseeks is tax equity, he said; ONLY ONE TAXED He noted that tobacco is the only agricultural product that Is subjected to an excise tax.. In taxing cigarettes, "you are taxing half of the popu- lation an, extreme amotuu fnr the benefit'ot all-thia shouldnh I be."' 0'Elaherty declared. W'hatahouCthet argument, that cigarettes are a luxury, and that the taxes bring ,,needed~ revenue for schools and i other nettssttaes? Wh a t isn't a luxury?" 0'Flaherty asked. The son of Wil.mer 0'Flehertv; the loaynt.e tyutr- man of' tAe R1Chmond Elec- turallBoand:,0'Flaharty attend- ed Thomas JefferttafHigh~ Schooll,spent one vear at The:: Bullis School in, SilverSpnng, I ', Md., then wenn on to the Navai l l 12. :

13. Academy, where he was grad- i uated with a B.S. degree in I, 1949. In addition to flying with the ' "Hurricane Hunters" sauad- ron, he flew out: of, Thule, Greenland; on ice patrols and: served a stint as a flight in- structor. In this job, be flew "four hops a day, six days a week ~ with kids trying to kill you the ~ whole time." He hasn't flown an airplane ~ since. O'Flaherty joined the To- , bacco Tax Council as assistantl executive director as soon as l he got out of the Navy. In Au- I gust, 1961. he was elr:cted exec- utiVe director. He is married to the former Barbara Covington~ and thev have two chiltlrem Jeff, and' "Deedi." Home is at 8507 Rivermont Drive. AMATEUR MAGICIAN' O'Flaherty enjoys boatingg and fishing and is an amateur magician. He belongs to Bat- tery Park Christian Church, ! the Richmond Rotary Club, the j American Legion, the Navy i League and the Sons of thel American Revolution. - 0'Flahertv will concern him-, self in the next~ tnvo months with trying to get, the General i Assembly to adopt the recom-I mendations of a special Vir-1 ginia Commission on the To~i bacco Tax. That commission, recommended that the state excise tax on cigarettes be re- duced from 2i; to 2 cents on July 1, 1968, and be removed two years after that. The excise tax measure was Imposed in 1960 as a three ~' cents tax and was reduced one- ~, half a cent in the 1966 General l~~ Assembly. It' produces annual 1 revenues of about $14, mil- lion. lion. 0'Flaherty thinks that Vir- ginia and other toi)acco st~tes should take the lead in reduc• g ing taxes on cigarettes. RISE EXPECTED He makes the startling pre- , ' diction that a year after the I. excise tax is removed in Vir- I ginia cigarette sales in the state will rise 75 per cent. Most of this will be achieved through sales to travelers pas- sing through Virginia, he feels, ~ noting that Virginia is the last, stop south and first stop north ( alofig, the Eastern Seaboard. O'Flaherty estimates that in l the seven years since the ex- ; cise tax was imposed in Vir- ginia retailers have lost $64 million in retail sales of ciga- rettes alone. "The tobacco industry Is an honorable industry, a good in- dustry," he asserted. "We need to~ tell our story better and! to get more people to lis- ten to it." ~ ~ i 1 ... r... r~