Keller @ Large: Congressman Lynch Explains Tax Revenue Concerns

Congressman Stephen Lynch spoke with Political Analyst Jon Keller about President Biden's infrastructure bill.

Video Transcript

- Time now for "Keller @ Large." here's Jon.

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JON KELLER: Well, good morning, everyone, and welcome. Very pleased to have with us to update us on things happening in Washington of concern to us here in Massachusetts, Congressman Stephen Lynch of the 8th congressional district, which he has represented since 2001. Boy, that seems like a million years ago. Representative, welcome, good to have you.

STEPHEN LYNCH: Good to be with you, Jon. Thank you.

JON KELLER: So President Biden last week rolled out part one of a multi-trillion dollar infrastructure plan that could help pay for a number of long-awaited improvements here in Massachusetts-- east-west rail service, improved service among them. It's to be paid for by increases in corporate taxes and taxes on high earning individuals.

And in a speech last week, congressman, you said, quote, "we're going to have to figure out if we expand the amount of economic activity, can we generate the taxes to support all of this?" End quote. Do you doubt that?

STEPHEN LYNCH: Well, it depends on how quickly we are able to restore businesses. There are some areas of my district, such as Brockton where we had a lot of small businesses-- we lost over 250,000 businesses across America. And so some of those businesses, I think, have the reserves and the wherewithal to come back relatively soon. Others were devastated.

So the pattern at which we restore the economic activity and, of course, generate the tax revenue will be different in every state. And so I'm not sure if we all get back 100% as soon as I would like. So the generation of tax revenue will be phased in.

And so I'm a bit concerned about that. And the impact of these variants that we're seeing, are those going to renew the shutdown in some states? So that's a concern. So the pace of the recovery worries me.

I believe in the recovery. I am fully confident in the recovery. But the pace of that, given the sort of checkerboard situation we have here with the responses to the pandemic and the economic activity, that allows them some variation as well.

JON KELLER: Well, and, of course, another variable is that we all know how effectively over the years corporations and wealthy individuals are able to evade-- legally evade-- higher taxes. In the same speech, you said we've got to be wise in our decisions about raising the revenue. Can you give me one example of what you mean-- what are you worried about?

STEPHEN LYNCH: Well, businesses coming back will be fragile. And so they will need extra support. And so if we clobber them coming out of the gate, they'll never survive. So we have to make sure-- now, we just passed a $1.9 trillion stimulus plan.

There's substantial support there. So we have provided the resources. But as we've seen with the CARES Act, sometimes the revenue didn't get to the people that we thought were most deserving. We steered it out through the Small Business Association and the banks. And they, of course, took care of their favorite customers. We can't allow that to happen. We have to make sure that we really provide the relief where it's most desperately needed.

JON KELLER: We got a break in a minute, but I want to slip in one more question here before we do. You recently chewed out the MBTA pretty good for planning layoffs after receiving more than $2 billion in federal aid. And you said they shouldn't take federal support from taxpayers then cut services to those same taxpayers.

But as I understand-- they did back down-- but as I understand their rationale, they want to minimize the red ink they're generating as a result of the collapse of ridership levels and the revenue that generates until there's a clearer idea of when or if those riders and the revenue will return, given the shift to remote work by so many sectors of our economy. Don't they have a point?

STEPHEN LYNCH: No. OK, so the devil is in the details, Jon. They were maintaining-- I'll give you a perfect example. These cuts were scheduled for May, June, and July, OK? So they had maintained ferry service across Boston Harbor for December, January, and February. And their cuts were scheduled for May, June, and July-- you know, at a point where we would actually have the vaccines out there in a big way. We've been ramping up the vaccines.

So we wanted the money and the activity to surge, you know? And so they were saying, OK, we're going to take the $2 billion. And meantime, we're going to cut the ability of people to get to work. We're going to cut the ability for schools to get back to in-person learning. So they were on the wrong page.

But I want to give credit to the governor and Steve Poftak. They reviewed their plan after we had our heart-to-heart discussion, and they reversed course. And I'm thankful for that.

JON KELLER: All right. Let's take that break. And when we return, more with Congressman Stephen Lynch of the 8th congressional district in a moment. Stay with us.