When I did my own withholding, I had to withhold Medicare and social security taxes on my employees behalf and deposit it quarterly. These are certainly taxes and there is withholding for the employer portion as well as for the employee portion withheld on their behalf along with income and any other applicable taxes.

Here’s a quote from the IRS [0]: “ An employer generally must withhold social security and Medicare taxes from employees' wages and pay the employer share of these taxes.”

[0] https://www.irs.gov/businesses/small-businesses-self-employe...

Contractors have to pay both halves. If they did this (big if) they’d be owed a refund.

You are entitled to a refund of any excessive withholding you make beyond your tax liability.

The argument is that, as the now employees understood themselves to be contractors, they paid the (higher) contractor tax rate (employee + employer). If the IRS is retconning them as employees and FTX owed the employer's share of the employees' taxes, the employees are entitled to a refund of the amount they overpaid.

When you're a 1099 contractor you fill out Schedule C and pay as the employee and the employer.