Payroll taxes are quite a normal thing, and it makes sense, since employees do add some non-zero amount to the amount of services that need to be provided by a given government even if they don't reside there.

The stupidity was that it was a flat, $500 tax, which is not a big deal if you're paying your tech bros six figures, but becomes quite a big deal if you have a lot of minimum-wage earning grocery baggers (who were among the professions and corporations that would've been most impacted)