Is the Administration Stupid or Lying?

On “Meet the Press” March 7, Health Care Scam and Inhumane Services Secretary Kathleen Sebelius delivered a most remarkable statement. In answer to a question about proposed taxes and other punishments for the badly behaving insurance industry, she said: “It puts the insurance companies, which ultimately pay these taxes, on notice that these taxes are coming.”

Were I David Gregory, I would have stopped and repeated her statement. Then I would have asked the obvious follow-up question: “Are you lying or stupid?”

Insurance companies do not pay taxes and never will. No other business does either. No such thing occurs. And telling people that it does is an attempt to delude them into thinking they can get something for nothing. It’s either adeliberate, cynical, vicious con job or crass stupidity.

It might be the latter. Years back, I sat next to former Vice-President Walter Mondale on a cross-country flight and spent three hours trying to educate him about this, and failed. I came away convinced he’s a nice fellow who is sincerely stupid.

But if I’m anything, I’m stubbornly persistent. So here we go again.

Secretary Sebelius: whatever taxes you levy on insurance companies are not “ultimately” paid by those companies. Not one red cent of them. Those taxes are paid by people in four groups:

    Policyholders who pay for insurance directly or in lieu of wages if provided by employers – via higher premiums and/or reduced benefits. Employers buying health insurance for workers, who must then raise prices on goods and services, including milk and diapers – also known as inflation. Wage earners who see jobs eliminated or full-time jobs replaced with part-time positions without benefits, and wages frozen or cut back – also known as unemployment and under-employment. Shareholders and investors whose capital is essential to the stability of the entire industry (Every extra $1 you take from them in taxes is $1 taken out of private capital markets and poured into the bottomless pit of the trillions-sized deficit.) 

You need to stop selling the public this despicable fairy tale. No insurance company can be taxed. Ever. It can be made to collect taxes from others and put them in a box and ship them to Washington. But it can’t be forced to pay taxes. Whatever tax you aim at insurance companies misses by a country mile and lands squarely in the laps of every working American.

Any such tax actually taxes every consumer of anything and everything – and not just those earning over $250,000.00. It’s not a something-for-nothing gift of health care from a government that merely grabs money from evil, heartless, rich insurance companies. It is sneaky, sleazy theft from everybody but insurance companies. Be ashamed.

If you’re spinning such nonsense out of honest ignorance, please, sit down with the owner of any business, large or small, and ask him to draw you a little picture. He’ll help you understand who pays your taxes and who doesn’t; who is punished and who can’t be punished with taxes. He can use little stick figures and different colors.

If you aren’t this ignorant, but are a knowledgeable liar, why?  Are you really the kind of person to set aside any shred of integrity in order to push forward Obama’s fiction?  Again, why?

It’d be nice to see somebody besides Sen. Judd Gregg refuse to be used as pawns and poster-children and lying weasels by the president. It’d be nice to see a “journalist” ask a tough, direct question, too.

Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 13 books. More information about Dan can be found at, and a free collection of his business resources including newsletters and webinars at

<?xml:namespace prefix = u1 />Like this article? Sign up for “The Balance Sheet,” BMI’s weekly e-mail newsletter.