There's a world of difference between income tax and payroll tax. Income tax is progressive, and payroll tax is regressive. The payroll tax burdens the poor proportionally far more than the wealthy. The revenue it generates should be made up with a commensurate increase in the income tax, thereby reducing the tax burden on the poor. 12.4% is a shitload of money when you're making $20,000/yr. There is no standard deduction for the payroll tax, no exemption; it just is...until you make $117,000 or thereabouts. Above that level you cease to pay, because payroll is earmarked for social security, the theory being that the benefit is capped, so why shouldn't the contribution. That theory doesn't really hold water, because many people don't directly benefit from all sorts of services to which they contribute. In effect someone making $234,000 only pays 6.2%, and so on (and someone deriving their income from capital gains--the wealthiest, typically--pays 0%). Regressive taxes are a type of upward redistribution, and pretty much all economists from all sides of the political spectrum are against them. It's a universally despised way of taxation among all but the most ardent defenders of the wealthy.