Return proposal does that yes. A burn proposal is another alternative which permanently reduces inflation rather than making any payout or accumulating the funds for later.
That is not implemented (any of them) in the initial version of SPS for various reasons. It could be added later, including via a proposal to pay a developer to implement it.
Some of it could be done offchain, by someone proposing to accept funds from SPS and then forward them as promised. This requires trust, but if the intermediary stopped paying, the funding could easily be cut off by removing SPS votes (proposals can pay out gradually over time).
It goes back to the SPS pool, which is separate from the reward pool that pays posts/comments.
Oh, so it's just saved for later?
Return proposal does that yes. A burn proposal is another alternative which permanently reduces inflation rather than making any payout or accumulating the funds for later.
Is there a proposal to send it to the reward pool (post reward pool) instead? Is there one to send it to witnesses or steem power holders?
That is not implemented (any of them) in the initial version of SPS for various reasons. It could be added later, including via a proposal to pay a developer to implement it.
Some of it could be done offchain, by someone proposing to accept funds from SPS and then forward them as promised. This requires trust, but if the intermediary stopped paying, the funding could easily be cut off by removing SPS votes (proposals can pay out gradually over time).