They would get their income tax back, but not payroll taxes. The distinction is important because Social Security only applies on income up to ~$140k (this yea

They would get their income tax back, but not payroll taxes. The distinction is important because Social Security only applies on income up to ~$140k (this year). Due to that, the amount of Social Security tax revenue from a poor person is fairly close to the amount paid by someone rich. A family of 4 at the federal poverty line ($26,500/year) pays $1,643 dollars to Social Security. Someone who makes $4M/year pays $8,853.60. So 5 families at the poverty line == 1 bajillionaire from a Social Security perspective. I'm not in favor of the proposal, but it's not as absurd as it looks, policy wise. Morally, I would agree with you. This is an inevitable outcome of combining low wages and 1099s. It's really hard to force yourself to put your payroll taxes away in savings when you're only netting $7/hr and your bills are past due. It does also put them in a position where they should really have a tax professional, instead of just doing TurboTax or whatever.