Social security (the large majority of the payroll tax) is highly progressive when paid out and then taxed.

This isn't a critique of social security payouts -- other than political expediency, there is no particular need to couple the payments with the current payroll tax source.

The end result is still a policy which oppresses the people who can not afford the tax more severely than it oppresses those who can. If the desired effect is a reduction in smoking, for example, the appropriate approach is to track and limit sales on a per-person basis. This, of course, is less attractive to the state, and more cumbersome to administer and specify, but it doesn't suffer from the obvious moral wrong: artificially pricing people out of perceived vice on the basis of class.