News for the East Bay's diverse, working-class majority.

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East Bay DSA

June 18, 2020

Don’t buy Jack Dorsey’s philanthropy hustle

By Pat Donnelly

On May 14, Oakland Mayor Libby Schaaf announced a $12.5 million initiative to provide computer and internet access to Oakland students learning remotely during the ongoing Covid-19 pandemic. Within a day, Jack Dorsey, the CEO of Twitter and Square pledged $10 million to the program — broadcasting his decision, naturally, with a tweet.

In response to widespread protests over the murder of George Floyd, Dorsey took similar initiatives to promote himself and his companies as leaders in the fight against racial injustice: giving $3 million to Colin Kaepernick’s Know Your Rights Camp, appointing Black nonprofit executive Darren Walker to the Square Board of Directors, and declaring Juneteenth a company holiday “forevermore” at Twitter and Square. 

Yet Twitter’s record on racial justice has consistently failed to match Dorsey’s rhetorical support for Black Lives Matter. Over the past decade, Twitter has actively enabled the spread of white supremacist propaganda, from verifying the account of Charlottesville leader Jason Kessler to allowing the President of the United States to repeatedly incite Islamaphobic violence against a member of Congress. These are not isolated incidents: they’re endemic to the business model of a platform that profits off the rapid dissemination of sensational content.

We should cast a similarly critical eye toward Dorsey’s support for Oakland students, which comes on the heels of a $1 billion pledge to combat the effects of Covid-19. Dorsey’s donation is welcome. Those of us with surplus income or wealth should give in proportion to our ability. In a democratic market economy, however, this is best done through progressive taxation: using socially-generated wealth to fund public services. Having made $4.8 billion off of the labor and data of others, as well as decades of public research and investment in what became the internet, Jack Dorsey owes his wealth to many other people.

Yet Dorsey has not been willing to pay his fair share in taxes. He’s spent the past decade publicly resisting efforts to tax his companies.

In 2011, Dorsey threatened to relocate Twitter in response to San Francisco’s payroll tax. To prevent Twitter from fleeing, the City enacted an infamous tax break, at a cost of $70.1 million from 2011 to 2019. The episode was a perfect illustration of how the threat of a capital strike can force governments to cater to the ultrarich. There’s also little evidence that the tax break has helped ordinary San Franciscans. Rather than creating jobs for existing residents of the Mid-Market and Tenderloin neighborhoods, the presence of Twitter and other tech companies in the area — including Square, of which Dorsey remains the chairman and CEO — has led to an influx of highly compensated young professionals, driving rents and the cost of living skyward. Even this “Twitter tax break” wasn’t enough for Dorsey, who later sued the city for an additional $1.27 million tax refund.

Given Twitter’s displacement of working-class residents in the neighborhoods bordering its Market Street headquarters, one might expect that Dorsey’s first charitable move would be to help people who had lost their homes. At the city level, this sort of displacement has disproportionately affected Black San Franciscans, whose population has declined sharply in each of the past three decades. Instead, Dorsey bashed Proposition C, which proposed to fund shelters and mental health services for homeless persons through a 0.5 percent tax on companies with more than $50 million in annual revenue. Despite opposition from Dorsey, fellow billionaires Michael Moritz and Mark Pincus, Mayor London Breed, and the real estate industry’s favorite State Senator, Scott Weiner, Prop C passed with over 61% of votes cast.

After the expiration of the tax break designed to lure Twitter, Square, and other companies to the city and the passing of Prop C, Dorsey changed his tack. Dorsey’s recent announcement that Square and Twitter are pivoting to remote work isn’t a response to the threat of the coronavirus. On the contrary, Dorsey announced plans in February for Twitter to move employees to remote work, stating that their San Francisco headquarters was “not serving us any longer.” Now that Twitter and Square are finally being forced to pay for public services, it seems like Dorsey no longer finds San Francisco a worthwhile investment.  

Too often the debate over taxing billionaires is framed as a tradeoff between an individual’s right to the fruits of their labor versus the social good provided by public services — in this case, the good of public education provided to over 37,000 students in the Oakland Unified School District. Yet Dorsey and other CEOs don’t become rich through their own labor. Twitter is a $23 billion company because investors value a product built by thousands of engineers and fueled by the exploitation of some 300 million users’ data. Dorsey’s $4.8 billion net worth is built on the backs of users, employees, and the citizens of San Francisco who subsidized his companies through tax exemptions. The same families in Oakland who now stand to benefit from Dorsey’s charity have seen their rents double in under five years thanks to tech-fueled gentrification, while Twitter saved $40 million through uncollected taxes.

At the end of the day, it’s good that Dorsey decided to give $10 million to Oakland public schools, rather than, say, buying additional near-infrared saunas for his $31 million property or investments in Bitcoin, whose production generates tens of millions of megatons in annual carbon emissions. But the needs of Oakland’s students shouldn’t hinge on the whims of an eccentric CEO. Racial justice won’t come from the spare change and symbolic actions of the ultrarich — it’ll come through defunding the police and public reinvestment in health, education, and economic opportunities for underserved communities. Education and other public goods should be fully, equitably, and democratically funded by demanding that Dorsey and other billionaires pay their fair share in taxes. After all, it’s our wealth too.