The Working Man’s Tax Revolt: An Interview with Dean Hazel

An IRS official called it “the biggest or at least one of the biggest tax protest movements in the country.” Treasury Secretary Donald Regan angrily classified it as “tax fraud” and vowed to initiate the “fast prosecution” of those involved.

At the center of all this controversy is a Pontiac, Michigan based organization called We the People ACT (American Citizens’ Tribunal) led by Dean Hazel, a GM assembly line worker. Since he helped to found it in 1980, Hazel has seen ACT’s membership grow from a handful of Pontiac and Flint autoworkers and independent businessmen to nearly 800 concerned citizens. In addition, over 3,000 autoworkers have followed ACT’s example and are challenging their IRS tax bills. In retaliation, Hazel was indicted in federal district court on April 14 for filing false W-4 forms.

At 28, Hazel has managed to compile a formidable knowledge of American constitutional history and tax law. While he does not consider himself a libertarian, his views on taxation will undoubtedly be of interest to LR’s readers. Hazel, while on an organizing tour in Chicago, consented to an over the phone interview for LR with David Beito.

LR: Could you briefly describe the history of ACT?

Hazel: I sat at my kitchen table one day and decided that the only way to cure the problems of this country was to get our people aware of what they can do to turn things around. I decided to form a group and it started out essentially as me and my typewriter. I tried to get some of the fellows at work involved, and some of them did (two to be exact), and we managed to get some press coverage. As a result of the press coverage, another fellow, who had been involved in the same kind of activity for a number of years, contacted me and we decided to put together a larger group.

We didn’t have a charter, or become officially open for membership, until January 1, 1980. Before that, we were really just an informal association of people who knew each other. We took money out of our pockets to pay for lecture halls and printing costs and finally decided to set up a formal organization where others could come in and share the burden.

LR: Are there any authors or other figures that have played an important role in shaping your political and economic views?

Hazel: Harry Browne had an effect on me, but I think the first book that had a major influence on my beliefs was The Unforgiven, by Charles Walters, Jr. It gave me some facts on taxes, finance, and the banking history of this country and why the Vietnam War was fought. It gave me a lot of information and led me on to other things.

Irwin Schiff’s writings will make your blood boil. I thought things were bad and then I read The Biggest Con and found out that they were even worse than I had believed. I’d have to say, though, that a lot of my political ideas came from books like the Federalist Papers and the writings of Thomas Jefferson. I’ve always been kind of a fan of Jefferson and been interested in the history of how this country was formed. You might say that I’ve always had a star in my eyes and really believed that liberty, freedom, and justice are what this country is all about. In a way, talking in the past tense, that may have been what this country was all about but somehow we’ve fallen into the depths of decay.

LR: Newsweek quoted you as saying that the income tax is unconstitutional. On what part of the Constitution do you base this belief?

Hazel: The income tax is constitutional. What I base their article on is bad journalism. They also said that I—a 28 year-old Pontiac man—founded the movement 14 years ago. My teachers thought I was a pain in the neck but not quite to that extent.

I’ve been on talk shows and some law professors have come on there and said, “These people are saying that the Sixteenth Amendment is unconstitutional and that’s obviously incorrect.” Of course, it’s part of the Constitution itself and it was never held to be unconstitutional by the courts. We’ve never said it was unconstitutional. All we said is what the Supreme Court said in a number of cases, which was that the Sixteenth Amendment gave Congress no new taxing power. Congress always had the power to lay taxes on income without the Sixteenth Amendment and they used to lay taxes on wages right up to the Pollock case in 1895. In that case, the Supreme Court ruled that a tax on income derived from personal property, real estate, or rents was a direct tax and must be subject to the rule of apportionment. That opened the door for the laborer not to be taxed because, according to the interpretation of the courts, your labor is your property. Now, you’ll find that you can sell your property like you can sell any other good. Well, if you sell goods and don’t make a profit on them, you don’t pay a tax, do you? Now, if someone pays you what your labor is worth, do you make a profit on it? Do you have to show a receipt from God?

LR: Could you explain the mechanics of apportionment?

Hazel: The founding fathers said that taxation without representation is tyranny; they linked the two together. That’s why in Article 1 Section 2 Clause 3 of the U.S. Constitution it says, “Representatives and direct taxes shall be apportioned among the several states,” and Article 1 Section 9 says, “No capitation, or other direct tax, shall be laid, unless in proportion to the Census...”

Now, if they decide to lay a tax on property, which is a direct tax, they take the census and divide it into the total amount of revenue they want to collect. Let’s say they want to collect one million dollars and they find that the state of Illinois has ten percent of the U.S. population. That means that Illinois gets ten percent of the U.S. Representatives and is responsible for collecting ten percent of the tax revenue ($100,000). The state can impose a tax on its ‘people’ to collect the $100,000, but only the kind of tax that the Illinois constitution empowers it to lay. Or, if the state government already has enough money in the treasury, it can pay out of there without laying the tax at all. It’s up to the state government to collect and pay. The graduated income tax, as it has been applied, is unconstitutional because it fails to abide by the rule of apportionment.

LR: Has this apportionment requirement been constitutionally tested recently?

Hazel: No, our arguments have never been in the courts. The Brushaber case in 1915 was the first case to test the Sixteenth Amendment and the Supreme Court held it to be constitutional but also pointed out that the requirement of apportionment that had existed previously remained in force.

LR: In These Times reported that ACT supports higher defense spending. Another newspaper article reported that your group supports a ban on abortions. Does ACT, as an organization, take stands on any of these issues?

Hazel: Last year a petition from a group called the American Heritage Protection Association circulated among our club members. Our members seemed to like it so we voted on whether it was a worthy thing to circulate, and we did. One of the grievances on the petition was that tax money was being used to pay for abortions. Basically, all we were saying is that we don’t want government tax dollars to be used for that purpose. As far as the issue of abortion itself, we neither came out for it or against it. As far as I’m personally concerned, it’s up to the individual to decide. The only thing we ever said about defense spending is that the government doesn’t need to levy an income tax to defend the country; there’s plenty of other taxes it can use instead. That’s all we said.

In our club charter it says that no one can speak the mind of another. So, rightfully, no one person can speak for the entire club. I can really just give you my views.

LR: What is your opinion of the government’s present defense policies?

Hazel: I think it’s kind of ridiculous that the government is spending all this money on troops overseas. If the government of Russia ever decided to move militarily, those people wouldn’t be able to hang on long enough to have another Dunkirk. If the U.S. government had stationed troops in Afghanistan, we’d be fighting there now. From a military standpoint, I think we’re wasting our tax money, but as a political strategy, it’s beautiful.

LR: How do you mean?

Hazel: The reason I said it’s beautiful is that if your object is to get us politically involved in all kinds of little controversies around the world, it’s the best strategy to pursue. If that’s what you want, that’s exactly what’s going to happen. I personally don’t see the sense in it.

When we get on the defense topic at our meetings, I point out that the government is taking at least one third of the revenue it has, aside from the personal income tax, and spending it on the military. What is that revenue being used for? Is it being used to defend this country or is it being used to defend the German and Japanese autoworker? And who’s paying for it? The American autoworker. Maybe the Germans and the Japanese would have to be more competitive in the marketplace if they had to pay for their own defense. I believe this country needs to be defended, but we ought to have a military strategist do it, not a politician.

LR: Would you describe yourself as a libertarian?

Hazel: No. My biggest disagreement with the Libertarians, from what I read in the Party platform, is their outlook on immigration. The American Indians had lousy immigration laws and look what happened to them. The Constitution was set up not only to protect our rights to property but also our rights to survive. I think that unrestricted immigration would end up threatening those rights of survival. I do find the philosophy behind libertarianism interesting and, from what I’ve seen, it’s very tolerant.

LR: What do you think of some of the Libertarian Party’s other positions, such as their views on prostitution?

Hazel: When it comes to morals, it’s really a question of freedom of religion and belief. People have certain First Amendment rights and I think the government has got its nose out of joint in dealing with moral issues such as prostitution. Local communities might get involved dealing with prostitution with their own little laws, but on the federal or even the state level, I don’t think they have that right. My opinion is that it shouldn’t be illegal in the first place. What it comes right down to is that I think everybody’s freedom and liberty go right up to the point where they start to physically endanger another person. Maybe that’s a little — what, liberal? — for some people, but that’s what I believe.

LR: We know that you don’t consider yourself a libertarian, but how would you describe your views?

Hazel: I’m just basically a Constitutionalist. To me, the political spectrum has total anarchy on the right and totalitarian government on the left and somewhere in between is a golden mean and that’s where constitutional government is located. I don’t know how far the libertarians go toward anarchy, but the Constitution is as close as I want to get. I think if we followed the Constitution we’d have a better society and a healthier economy. We’d have a much smaller government and more individual freedom than we’ve known in our lifetime.

LR: Do you subscribe to the libertarian view that all forced taxation, even in a society where it could somehow be made constitutional, would still be theft and illegitimate?

Hazel: Basically, taxation is theft anyway. It started when we first got government. I think that if you were to look at history, you’d find out that a long time ago there were two kinds of people: those who produced and those who plundered. Then there were the good guys, who came along and kept the other plunderers away—and that was government. That was protection, and governments were basically formed to protect property rights, and when they become so big, like ours, they become the plunderers again. What we have to do is to make sure that a document like our Constitution is followed. Jefferson said, “The Constitution is the chains by which we bind up government to where it can do no mischief.” I believe that Madison said, “The powers granted to the Federal government by the Constitution are few and well defined.” You don’t hear too many people who work for the government say that anymore, do you?

LR: Then you do believe that taxation has some purpose?

Hazel: Well, it does have the purpose to provide us with a government, to take care of our basic needs.

LR: Couldn’t people provide those needs voluntarily?

Hazel: Well, they’re supposed to be doing that; haven’t you heard? The IRS has an outlook that taxes are voluntary, too, and they explained it at Irwin Schiff’s trial. They said that it’s like a red light. You either stop for it or you get a ticket. It’s a voluntary thing.

LR: That’s certainly a novel concept of volunteerism.

Hazel: There’s another concept, too, which I think is more frank. You hold up a gun to somebody’s head and whatever they do is voluntary on their part, because they can refuse to do it. Their brains may be plastered all over the wall behind them, but they had a choice. This is what I feel: how can you say you’re free when you fear government? This is supposed to be the home of the free and the brave, but today it seems to have become the home of the meek and the cowards.

There’s good men in the government, but they’re a little few and far between right now. A favorite quote of mine that relates to this subject is from Sidney J. Harris, who said, “The world has always been betrayed, not by scoundrels, but by decent men with bad ideas.” I’ve found that when I talk to government officials, even those who work for the Federal Reserve System, that many of them agree with what we’re trying to do. We’ve even had the Federal Reserve bankers at the Detroit branch agree with us behind closed doors. They’ve even said that they hope we’re successful, but they have their doubts. Unfortunately, they’re pretty cowardly and afraid of losing their jobs. They’re doing what Benjamin Franklin criticized people for doing. He said, “Those that would give up essential liberty for a little temporary safety deserve neither liberty or safety.” Our problem today is that we have a lot of people who don’t see what’s at stake.

LR: Why do you think that is?

Hazel: Maybe it’s our poor educational system. Locally we even made some headlines when we found that the school textbooks had rewritten parts of the Constitution. In Article 1, where it says that no “direct tax shall be laid, unless in proportion to the Census,” the textbook had an asterisk and at the bottom of the page it said “Changed by the Sixteenth Amendment.” However, according to the Supreme Court, the Sixteenth Amendment gave Congress no new taxing power.

And there’s another thing that they’re doing in the schools too. They’re asking kids questions like this and grading them on it: They give an example of a lifeboat that holds six people and there’s eight of you but you happen to have an oar so you can probably fight your way into it. Among the other people is a fireman, a doctor, a policeman, and an invalid old lady. What are you going to do? They’re trying to teach people to just lay down and die and let everybody else into the boat. You can’t sit there and foretell the future and be able to tell what to do in a situation like that. Who do they want the kids to put first? The policeman, the doctor, and the fireman. Maybe, they’re trying to give them the idea that they should be a fireman, a policeman, or a doctor.

They’re putting kids through this kind of stuff at school and trying to pound in their heads the idea that they just don’t matter. It’s the Great Society that everybody is told to look out for, and the individual is considered unimportant.

LR: What do you see as ACT’s essential purpose?

Hazel: We’re just urging people to study and to find out what the Constitution, the case law, and the statutes say, and what they feel is necessary. Everyone should do what they feel is right but should be sure that they know the consequences beforehand.

We also urge our members to write letters to Congress and promote various bills that have been proposed. There are bills in Congress right now that are supposed to knock down the Sixteenth Amendment. There’s the Liberty Amendment, the best part of which is Section 4 which says, “After the Sixteenth Amendment shall stand repealed and thereafter Congress shall not levy taxes on personal incomes, estates, and or gifts.” Another bill that sounds good is HR 391, proposed by Representative Ron Paul. It would repeal the privilege of banks to create money. There’s one I really like, HR 2389, which has been called “the taxpayers’ bill of rights.” It provides that if people go into court and win in their arguments against the IRS, IRS has to pay the cost of their defense. It also has a provision that if the IRS conducts illegal surveillance, it has to pay any actual damages that are suffered by the plaintiff.

LR: You mentioned a bill proposed by Ron Paul. Are you aware that he has proposed another bill, HR 5134, to abolish the Selective Service System?

Hazel: I’ve argued that if the Thirteenth Amendment was really taken at face value you wouldn’t think that there could be a Selective Service, but they have case law to the contrary. I had always contended that the Thirteenth Amendment would have protected me from going to Vietnam, and maybe it would have, but I never had the opportunity to go before a jury. If I had, I would have stated that if the jury upholds the Constitution, then I know that my country is secure from domestic enemies. Which means that I’d go down and enlist right away if the jury shows me that the Thirteenth Amendment means what it says. I think I probably would have received a judgment in my favor with that argument.

I don’t mind fighting for my country, but what makes me sick is that when you start studying history you find out how we got involved in a lot of these wars. In Vietnam, it seems that all we were in there for was to protect the leases that the oil companies had with the government in the south. Once that government was crushed, look what happened. The oil companies came in and negotiated with the new masters, but they were kicked out. The Communists told them, “We’re not going to let you plunder our people and steal their resources.” I can respect them for that.

LR: You’ve been quoted as saying the IRS operates through fear. Could you give us some examples of how the IRS has used fear as a tactic?

Hazel: I’ve seen IRS employees on talk shows who have admitted that the whole premise behind audits is to instill fear so they can get more voluntary compliance. Our members, especially the ones who aren’t well informed, might get scared the first couple of times that they confront the IRS. It’s surprising, though, how quickly the fear leaves them once they sit down and study the laws and learn how to assert their rights, or rather, how not to surrender them unknowingly.

On this issue of IRS tactics, there’s something that I’d like to clear up. Reports have been getting in the newspapers that we’ve been telling people to claim 99 dependents on their W-4 forms. If you look at a W-4 withholding allowance certificate, you’ll see that it says on line one, total number of allowances; on line two, additional amount of money you want deducted from each paycheck if your employer agrees to it; and on line three you claim exempt if you don’t have any tax liability at all, and nothing will be withheld. Now, where does it say dependents? It keeps coming up in the newspapers and it just burns me up to see it. The only thing I can think of is that it makes us look like liars right off the bat, because nobody has 99 dependents. Most of our members claimed exempt, not 99 dependents. We’ve contacted the AP, the UPI, and our local newspapers and television stations.

LR: Where do you think the media is getting that information?

Hazel: IRS! I know that because the reporters told me that the IRS gave them that information. In one case a company changed one of our members’ W-4 form. They crossed out exempt where he’d written it and wrote 99 allowances. Which, by the way, doesn’t mean that you get any exemptions, but you expect to have $99,000 that isn’t taxable. He found out about it and went in and ripped his W-4 form up.

LR: Many critics of the tax revolt movement have charged that it favors the rich. They claim that the wealthy gain a disproportionate windfall from tax revolts and that the poor who depend on government services are unfairly harmed. How do you respond to those charges?

Hazel: Why are the poor on government services? They’re on government services because the people aren’t buying trucks, cars, or other goods and services that could provide the poor with employment. When people have to pay taxes to the government, which doesn’t have to produce, it takes money out of the marketplace that could otherwise provide the poor with jobs.

The day before ACT went national I was a guest on a radio program. A woman called in who worked for HEW in their Headstart program, and I thought she was going to tear me apart. But she said, what you guys are saying is absolutely correct, and she told me that she could name five or seven private charitable organizations that could do exactly what her program is doing if they shut it down tomorrow. If you abolish the tax on wages, the workers of this country would be able to give 100 percent of that money to a local charity that, unlike government, is under their control.

If you say the tax revolt favors the rich, when was the Ford Foundation and the Rockefeller Foundation created? 1913, or at least in that time slot. The rich aren’t going to pay, no matter what happens. It’s funny, if you go back and read the arguments when the Sixteenth Amendment was passed, they were going to soak the rich. Look who’s paying it now.

Our organization is made up mostly of blue collar workers and small businessmen. I wish we had some philanthropists, because we could use the money.

LR: Are there any plans to extend ACT outside of Michigan?

Hazel: Not really. I was speaking in Wisconsin this last week and everyplace I went I tried to recruit people into a club, their own club. I’m a guy that believes in liberty and individualism, and I realize that if our club gets too big we’re not going to represent all our members properly. We’d have the same problem that the federal government and the national labor unions have, or any other organization that gets so large that it can’t at least maintain a third party relationship with its members. I think the members of every club should all live in the same community.

LR: Have you had any success on your organizing tour?

Hazel: I think so, but the kind of success we have, you don’t find out until much later.

LR: I’m sure that many of LR’s readers would like to have more information on or would like to make a contribution to ACT. Could you give us the address of ACT?

Hazel: Sure. We the People ACT, P.O. Box 134, Pontiac, Michigan 48056.

LR: Is there anything else that you’d like to say?

Hazel: Yes, there is something. This is what Teddy Roosevelt had to say about patriotism, and this is why I feel that our group is patriotic: “Patriotism means to stand by the country. It doesn’t mean to stand by the President or any other public official save exactly to the degree to which he himself stands by the country. It is unpatriotic not to oppose him to the extent that by inefficiency he fails in his duty to stand by the country.” Don’t you think that the United States government is failing to stand by the country, because it’s so inefficient?

LR: Thank you, Mr. Hazel.