The other objection is the massive revenue hit to the federal government. In 2010 (the last year before the recent payroll tax holiday), social insurance taxes raised $865 billion in revenue, according to the Congressional Budget Office. But there are a number of ways to recoup that revenue. As stated above, eliminating the payroll tax would make it easier to get rid of a lot of credits, loopholes and deductions. Also, if lower-income Americans aren't paying payroll taxes, they can pay a bit more in income taxes. This would also deal with a conservative complaint that the income tax system needs to be reformed so everybody has at least some skin in the game. Furthermore, if businesses react as expected to the tax changes by raising salaries and hiring more workers, it would expand the tax base.
Obviously, this is a very theoretical, bare-bones proposal that would require a lot more quantitative analysis. But if properly fleshed out, it could be a bold way to create a simpler tax code that maintains progressivity and encourages employment.
— The Washington Examiner