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Inside Twitter’s Decision to Cut Off Trump

SAN FRANCISCO — Jack Dorsey, Twitter’s chief executive, was working remotely on a private island in French Polynesia frequented by celebrities escaping the paparazzi when a phone call interrupted him on Jan. 6.On the line was Vijaya Gadde, Twitter’s top lawyer and safety expert, with an update from the real world. She said she and other company executives had decided to lock President Trump’s account, temporarily, to prevent him from posting statements that might provoke more violence after a mob stormed the U.S. Capitol that day.Mr. Dorsey was concerned about the move, said two people with …

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California Tax Revolt Faces a Retreat, 40 Years Later

OAKLAND, Calif. — In 1978, a Los Angeles businessman named Howard Jarvis led an insurgent campaign to pass Proposition 13, a ballot measure that limited California property taxes and inspired a nationwide tax revolt. The law has been considered sacrosanct ever since, something California governors and legislators challenge at their peril.

Now, as a pandemic tears through local budgets, a well-financed campaign backed by teachers’ unions has mounted a serious challenge to a major portion of the law: its application to commercial property.

If voters approve the effort next week, they would give labor and progressive groups a striking victory in raising the low tax rates that longtime property owners enjoy. If it fails, the campaign will have spent tens of millions of dollars only to affirm that Proposition 13 is untouchable.

The new initiative, Proposition 15, would amend the state’s Constitution so that properties like offices and industrial parks would no longer be protected by Proposition 13. By creating a “split roll” system, in which residential property would continue to be shielded from tax increases but commercial property would not, backers hope to capitalize on Democratic energy to raise taxes on large corporations without alarming homeowners.

“We can’t afford to continue to give large corporations a tax break they don’t need when we desperately need to invest in infrastructure, first responders, public health and public education,” said Catherine Bracy, executive director of the TechEquity Collaborative, a nonprofit group that mobilizes tech workers on issues of economic inclusion.

Proposition 15 would raise $6.5 billion to $11.5 billion a year for public schools, community colleges and city and county governments, according to a nonpartisan state agency. The Yes campaign, called Schools and Communities First, is backed by a number of public employees unions and the Chan Zuckerberg Initiative, the philanthropic organization founded by Mark Zuckerberg, the Facebook chief executive, and his wife, Priscilla Chan.

The measure’s opponents, including a number of business associations and large property owners like the Blackstone Group, argue that the tax increase would hurt small businesses. They have also tried to frame the measure as one that, if successful, will soon reach for residential properties.

“They want to do this because they believe now is an opportunity to break up Proposition 13,” said Rex Hime, chief executive of the California Business Properties Association, a trade group for owners of offices, industrial parks and shopping centers. “They’re coming after homeowner protections next.”

The two sides have raised more than $60 million each for their campaigns. Support is also evenly split: A recent poll by the Public Policy Institute of California showed that Proposition 15 has split the electorate, garnering the support of 49 percent of likely voters, with 45 percent opposed and 6 percent undecided. It has won a number of prominent endorsements, including those of Gov. Gavin Newsom; Joseph R. Biden Jr., the Democratic presidential nominee; and his running mate, Senator Kamala Harris of California.

Proposition 13’s lock on California politics began with the bouts of hyperinflation that shredded household budgets through much of the 1970s. In addition to the rising cost of food, electricity and other staples, the value of housing — and by extension, property taxes — also soared. In California, residential property values rose 250 percent from 1970 to 1980, while household income remained flat.

As tax payments consumed a larger share of homeowners’ budgets, Mr. Jarvis, a retired businessman turned anti-tax gadfly, mounted a 1978 citizens’ initiative, eventually called Proposition 13, that would cut California property taxes and limit future tax increases to no more than 2 percent a year, unless the property was sold. It passed with just under two-thirds of the vote and has since endured various legal challenges. In 1992, the U.S. Supreme Court upheld the legality of Proposition 13 but called it “distasteful and unwise.”

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Credit…Associated Press
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Proposition 13: Mad as Hell

In 1978, California voters passed Proposition 13, which lowered property taxes for millions of the state’s homeowners. Decades later, what has it meant?

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In 1978, California voters passed Proposition 13, which lowered property taxes for millions of the state’s homeowners. Decades later, what has it meant?

Mr. Jarvis, who died in 1986, framed his campaign as a way to make the tax system more equal, but Proposition 13’s legacy has been the opposite. Because property values are reassessed for tax purposes only after a building is sold, the law has created a wildly disparate system in which new buyers pay vastly higher taxes than longtime owners.

It is not uncommon for neighbors to pay double or triple the taxes of a similar home on the same block. A recent analysis of property taxes across the Bay Area is rife with eye-popping comparisons, like a $9 million home in an exclusive neighborhood of San Francisco that has lower property taxes than a $331,000 home near an oil refinery across the bay in Richmond.

When Proposition 13 passed, commercial property taxes were almost an afterthought. But since skyscrapers and shopping malls do not change hands as often as homes do, the law has shifted the property tax burden from corporations to homeowners. In 1975, a little under half the property taxes in Los Angeles County were paid by commercial properties. By 2017, commercial properties accounted for just over one-quarter of the property tax roll.

“It boggles the mind how ingrained this thing is in our culture, given how regressive it is,” said Christopher Thornberg, founding partner of Beacon Economics, a consulting firm in Los Angeles.

When backers started collecting signatures to qualify Proposition 15 for the ballot last year, the measure was framed as a way to make the state’s tax collections broader and more equitable by raising rates on commercial property holders. Now, as the state, like the nation, begins a difficult recovery from the coronavirus recession, it has become as much about backstopping essential services when budgets are under stress.

In addition to keeping homeowners under the 1978 limits, the new measure would not affect apartment buildings and agricultural land. It would be phased in over several years, and it has exemptions for business owners with $3 million or less in holdings in California. Because of the exemptions, various studies have shown that Proposition 15’s tax increases would sidestep most small businesses and instead fall on corporations that control huge parcels of real estate, like Walt Disney’s studio lot in Burbank, or 555 California, a San Francisco office tower owned by a partnership that includes Vornado Realty Trust and President Trump.

But with the economy still hampered by Covid-19, and many stores and restaurants on the brink of extinction, the opposition message has resonated with people like Barbara Stelzriede. Ms. Stelzriede is the general manager of George & Walt’s, a sports bar in the Rockridge neighborhood of Oakland, and a fourth-generation member of the family that has owned the bar’s building and surrounding property since 1945.

On a recent afternoon, in addition to neon beer lights and a 21-and-over sign, the bar’s window was emblazoned with a bright yellow sign that had “Vote NO on 15. It will put small corporations out of business!!!” in Ms. Stelzriede’s handwriting. Sitting on a bar stool, among a mess of hammers, drills and extension cords that were being used to install a plexiglass barrier around the bar and plastic curtains around the tables, she discussed her anxiety about the bar’s pending reopening, what business would be like afterward, fears that the Proposition 15 money wouldn’t go to schools as proponents have advertised, and suspicion that the measure would open the door to higher taxes on apartment buildings and houses.

“There couldn’t be a worse time in the world right now for them to be doing this,” she said.

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Credit…Jim Wilson/The New York Times
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Credit…Jim Wilson/The New York Times

Some of her neighbors disagree. Last week, someone taped the window with a passionate response to Ms. Stelzriede’s sign. “MILLIONS upon MILLIONS of school kids suffered for more than 40 YEARS,” the letter said. “Disneyland + other MEGA CORPORATIONS are still assessed at their same property values from decades ago. PROP 15 = FAIR + JUST! It’s TIME.”

But it’s not just businesses that own their buildings that are worried. Across the state, landlords construct commercial leases so that tenants are responsible for a portion of the property taxes (doing this increases the value of the building in the event the property is sold and the taxes are reassessed).

“Virtually no landlords give Proposition 13 protection,” said Gerald Porter, founding principal of Cresa, a commercial real estate company in Los Angeles.

Clauses like that have Laurie Thomas, the owner of two small restaurants — Rose’s Café and Terzo, both in San Francisco — worried that she and other restaurant owners will be hit by higher taxes if Proposition 15 passes. Today, as part of her lease, Ms. Thomas is responsible for about $6,000 a year in property taxes at one of her locations. She estimates that would jump to about $40,000 if the building was assessed at market value. “Our lease clearly says that I am on the hook for 50 percent of the property taxes — it’s a direct pass-through,” she said.

Mr. Thornberg, the economist, doubts that this can happen on a large scale. Much more than property taxes, he said, lease rates reflect market fundamentals like size, location and a building’s particular amenities.

In a recent study for the Silicon Valley Foundation, Mr. Thornberg’s firm tried to gauge the impact of Proposition 15 on leases by analyzing commercial rents in similar buildings with different tax bills. “The owners of these buildings who are paying well below market tax rates are not passing the savings to their tenants,” he said. “In other words, they are charging what the market will bear and are unlikely to be able to pass along additional costs.”

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It’s a Ballot Fight for Survival for Gig Companies Like Uber

OAKLAND, Calif. — By late August, the urgency was becoming clear. Top executives of Uber, Lyft and the delivery service DoorDash met to discuss a California ballot measure that would exempt them from a new state labor law and save their companies hundreds of millions of dollars.

The survival of their businesses was on the ballot.

Days later, political strategists responded to the executives’ concerns by telling the companies, which had already pledged $90 million to back the measure, that they needed to spend a lot more if they wanted to win, said three people familiar with the discussions, who were not allowed to talk about them publicly.

The fight over the ballot measure, Proposition 22, has become the most expensive in the state’s history since then, with its backers contributing nearly $200 million and 10 days still to go until the Nov. 3 election. Along the way, the companies have repeatedly been accused of heavy-handed tactics; a lawsuit filed on Thursday claims Uber is coercing the support of its drivers.

Despite the big spending and a barrage of television advertising, only 39 percent of likely voters said they supported Uber and Lyft in a poll last month by the University of California, Berkeley, while 36 percent opposed their proposal and others were undecided. People close to the campaign said they would want to see close to 60 percent approval in polling before they could breathe a sigh of relief.

The ballot measure, which is also being backed by Instacart and a delivery company that Uber is acquiring, Postmates, could be a harbinger for gig companies in the rest of the country.

Prop 22 would exempt the companies from complying with a law that went into effect at the beginning of the year, while offering limited benefits to drivers. The law is intended to force them to treat gig workers as employees, but Uber and its peers have resisted, fearing that the cost of benefits like unemployment insurance and health care could tip them into a downward financial spiral.

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Credit…Tag Christof for The New York Times

Though Uber and Lyft, for example, are publicly traded companies with a combined worth of $70.5 billion, they have never been profitable. They lose billions of dollars each year, and the pandemic has made turning a profit even more difficult. DoorDash, which has filed to go public, has also struggled. Analysts estimate that complying with California’s gig-worker law could cost Uber, which lost $1.8 billion in its most recent quarter, as much as $500 million a year.

Uber said it planned to cut off work for the approximately 158,000 California drivers who were active on the platform each quarter if its ballot measure failed. It would employ roughly 51,000 remaining drivers, it said, and raise fares to meet the higher business costs.

The ballot fight gained additional urgency Thursday evening when the California First District Court of Appeal ruled that Uber and Lyft must treat their California drivers as employees under the new labor law. The state attorney general and the city attorneys of San Francisco, Los Angeles and San Diego had sued the companies in May to enforce the law.

“If Prop 22 does not win, we will do our best to adjust,” said Dara Khosrowshahi, Uber’s chief executive, in a Wall Street Journal interview this week. “Where in California we can operate is a question mark, and the size and scale of the business will be substantially reduced.”

In past dust-ups with local regulators, Uber rallied its passengers for support. The pandemic has made that difficult, so it has urged its tech employees to get involved and used its app to reach out to drivers for support.

The Yes on 22 campaign also started an effort to organize drivers, a move copied from the labor groups that have long tried to organize drivers to fight for better working conditions. And it has forged relationships with high-profile advocacy groups, like Mothers Against Drunk Driving and the California chapter of the N.A.A.C.P.

“Drivers want independence plus benefits by a four-to-one margin, and we’re going to fight for them,” said Julie Wood, a spokeswoman for Lyft. “We believe California voters are on the side of drivers, too.”

A spokesman for DoorDash, Taylor Bennett, said, “Our support for Prop 22 is part of our commitment to protecting the economic opportunity that tens of thousands of Californians value and the access to delivery that so many restaurants rely on, especially at such a critical time.”

A spokeswoman for Instacart declined to comment. Postmates did not respond to a request for comment.

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In an effort to gain support, the companies have bombarded riders and drivers with push notifications, campaign ads that appear in their apps and emails promoting Prop 22. Before logging on to start work, Uber drivers have been presented with a slide show of warnings about how their lives could change if the proposition fails.

“A no vote would mean far fewer jobs,” one of the slides on the Uber app warned. “That’s why we’re fighting so hard to win.”

In the lawsuit filed against Uber on Thursday, drivers claim that the messages violated a state law that forbids employers to coerce their employees to participate in political activity.

“I can’t rule out that employers have engaged in coercive tactics like this in the past, but I have never heard of an employer engaging in this sort of barrage of coercive communications on such a broad level, ever,” said one of the attorneys for the drivers, David Lowe, a partner at Rudy, Exelrod, Zieff & Lowe. “It is such an extraordinary thing, from my perspective, for Uber to exploit this captive audience of workers.” Mr. Lowe said he opposed Prop 22.

Matt Kallman, an Uber spokesman, said, “This is an absurd lawsuit, without merit, filed solely for press attention and without regard for the facts.” He added, “It can’t distract from the truth: that the vast majority of drivers support Prop 22.”

In early October, the Prop 22 campaign was denounced by Senator Bernie Sanders after a fake progressive group calling itself Feel the Bern endorsed the proposition in a campaign flier that implied Uber had the backing of progressive leaders. The mailers were, in fact, sent by a firm that creates political mailers representing different views.

“The Prop 22 campaign is working hard to reach voters across the state and the political spectrum to ensure they know that drivers overwhelmingly support Prop 22,” said Geoff Vetter, a spokesman for the Yes on 22 campaign, which is funded by Uber, Lyft, DoorDash and other gig economy companies.

Questions have also been raised about the N.A.A.C.P. endorsement. A political consulting firm run by Alice Huffman, the leader of the California N.A.A.C.P., has received $85,000 from the gig companies’ campaign, public records show. The payment was reported earlier by the news site CalMatters.

Mr. Vetter said the payments were for “outreach.” The N.A.A.C.P. did not respond to a request for comment.

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Credit…Jim Wilson/The New York Times

Uber held an all-hands meeting this month for employees to meet drivers who support the proposition, and sent several emails encouraging staff to lobby friends and family.

Although the internal messages were upbeat, the policy staff raised concerns with campaign consultants during the meetings in late August and early September, the people familiar with those meetings said. Among their worries: that the ballot language was unfavorable to the companies, and that people were voting earlier than usual because of the pandemic, meaning advertising would need to be rapid and aggressive.

“We look at the data every day, and our metrics show a tight race,” Justin Kintz, Uber’s head of public policy, said in an early October email to Uber employees, obtained by The New York Times. “At the same time, with continued strong execution against our plan, we’re confident we can win.”

While the email noted that campaigning was optional, Mr. Kintz encouraged employees to participate in texting banks to contact voters and to promote the campaign in conversations with friends.

“The big reason that you’re seeing so much spending is because of the high stakes in this election,” said Mr. Vetter, the spokesman for the campaign. “Hundreds of thousands of jobs are on the line. These are services that millions of Californians rely on.”

The opposition campaign, which is funded by labor unions, has raised about $15 million. Supporters of the No on 22 campaign have argued that voters should reject the push by tech companies, and that the measure would harm workers already at a disadvantage during the pandemic.

“Proposition 22 will make racial inequality worse in California at the worst possible time,” said Representative Barbara Lee, a California Democrat. “You have very clearly crossed the line when you try to claim the equity mantle for a campaign that has always been about allowing multibillion-dollar app companies to write their own law so that they can keep exploiting the labor of drivers, eight in 10 of whom are people of color.”

No matter the outcome of the vote, the gig companies and their opponents are likely to take their campaigns to Washington. Massachusetts has filed a lawsuit similar to the one that the California court decided on Thursday evening, and Uber hopes to avoid continued state-by-state battles by pressing for federal legislation.

Erin Griffith and Noam Scheiber contributed reporting.