CAN MEASURE THE HUMAN IMPACT OF OUR TAXES

When investing in a business, you are a shareholder expecting a return on your investment (ROI).

But as a citizen, you are typically called a taxpayer. In reality, we are tax-investors. Our tax dollars need to generate a positive human, social or environmental impact. In this economy, businesses have slashed capital spending, forcing the government to “reinvest” hundreds of billions for recovery.

So, how will America measure the return on investment (ROI) of the federally-approved stimulus? More importantly, how will President Obama highlight successes, call out failing programs, and ensure the highest possible “return on investment” of taxpayer dollars?

The American Recovery and Reinvestment Act ( full 407 page PDF) authorizes an Accountability and Transparency Board and specifies urgent (“flash”), quarterly and annual reporting to track metrics like job creation and economic growth.

When President Obama, governors, mayors and officials use a scorecard to track success, we recommend they track HIP metrics like these:

WEALTH: Job creation, income per person and net worth per person. And which investments will create the most jobs? According to this chart from Congressional testimony using Dept of Commerce data, each $1 million federal investment can create 23 educational services jobs, or 17 public-infrastructure jobs, or 16 “green” jobs. That beats tax cuts (14 jobs per $1 million), military spending (11) and oil and gas (4). The Reinvestment Act also specifies that worker compensation be in line with typical pay rates of similar work (and hire only American workers for companies taking TARP bailout funding).

HEALTH: Access to affordable health care, coverage for workers, and increases in health metrics. Wellness programs at corporations, from General Mills to Motorola to Xerox, show highly attractive financial paybacks (2-to-1 and more) and increased quality of health for the employees participating. Future demand for Medicare can be reduced as well. More corporate examples and payback data are here:

EARTH: Greenhouse gas emissions (GHG), energy usage (BTUs), water usage (volume), waste (volume). Major retrofits and increased eco-efficiency of buildings will reduce monthly expenses for fuel and utilities, as well as eliminate pollution, For a “green” school, a $3 per-square-foot investment would yield $11 per sq.ft. in energy/emission/water benefits – and another $63 per sq.ft. in healthier staff and increased performance of both teachers and students – see the data.

EQUALITY: Gender equality, ethnic balance, income-class distribution. US society is 50-50 men/women, and a mix of ethnicities (e.g. 14% Hispanic-American, 13% African-American, 4% Asian-American), but employment does not always match up with the citizens served. Government contractors like Lockheed Martin and Northrop have some of the highest rates of supplier diversity, due to the requirements of federal contracts. Furthermore, battling illiteracy can reduce the number of criminals (and save money). While 60% of prison inmates are illiterate (as are 85% of juvenile offenders), inmates receiving literacy help have a 16% chance of returning to prison, as opposed to 70% who receive no help. Taxpayer could save $25,000 per year per inmate and nearly double that amount for juvenile offenders, with an investment in education.

TRUST: Transparency of information, including the impact metrics per dollar invested above. The Recovery Act mandates “appropriate use of taxpayer dollars,” and funding details should also be posted on a website. The more transparency about progress and expected benefits will lead to higher public confidence and recognition of high ROI projects.

In my conversation with Honolulu mayor Mufi Hannemann this week, he highlighted the kick-off of the first light-rail system for the Hawai’ian capital. It was possible a few decades ago, but the local politicians opposed raising the taxes to match federal funds. Mayor Hannemann, elected in 2005, worked to secure state funds for the city, before applying for Federal dollars. When completed, the new elevated-rail system will yield lesser congestion and pollution, and a healthier, eco-efficient and more equal transportation for citizens and tourists.

The HIP Scorecard can be used for tax-investors and governments, as well as for-profit corporations. We all seek Human Impact and a Positive ROI – whether as tax-investors to government, donor-investors to charity or shareholder-investors of corporations. And that is the essence of being a HIP society.

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How can you track the Human Impact of the forthcoming reinvestment? Go to www.Recovery.gov to provide feedback and participate.

What HIP metrics should be tracked in your city, county or state?

What should the ROI of your tax-investment be?

ADD YOUR COMMENTS BELOW:

WATCH this HIP Investor webinar ( CLICK HERE ) to see how McCain’s and Obama’s proposed policies as President compare, according to the HIP methodology, including:

• HEALTH - will 47 million uninsured Americans be covered?
• WEALTH – how might your taxes shift?
• EARTH - who will support actions for climate change?
• EQUALITY – how will all Americans have an equal chance to succeed?
• TRUST – who will advocate transparency?
• INNOVATION – what policies will support renewed jobs and revenue?

The event featured HIP Investor CEO Paul Herman, HIP Associate Wil Keenan, and Sam Dorman from the League of Young Voters.

Please CLICK HERE to view this highly valuable, one-hour webinar. (You will need to click the “dimdim” logo; and then there will be a five-second pause before the audio starts.)

If you would prefer to view the PowerPoint (PPT) presented in the webinar, CLICK HERE .

PLEASE VOTE ON NOVEMBER 4, 2008 – AND SHARE THIS WEBINAR WITH THOSE WHO ARE SEEKING MORE INFORMATION ON THE ISSUES.