Payroll tax cut standoff's impact: What $40 a paycheck means to you
December 22nd, 2011
09:53 AM ET

Payroll tax cut standoff's impact: What $40 a paycheck means to you

House Republicans on Tuesday rejected a Senate deal to temporarily extend the payroll tax holiday, leaving the White House and Congress at an impasse and creating a showdown between President Barack Obama and House Speaker John Boehner.

The tax cut is set to expire on December 31. Ending the tax break would cost the typical family about $1,000 a year, or $40 per bi-weekly paycheck for those who earn about $50,000 a year.

With frustration on both sides of the aisle, President Obama and the White House took to social media, hoping to get the public on their side in a public relations showdown with the Republican Party. The White House asked Americans what $40 means to them in an attempt to help put pressure on Republicans to pass the measure.

[tweet https://twitter.com/whitehouse/status/149237000522825729%5D

You responded in force on Twitter using the hashtag #40dollars.  President Obama said that the White House received more than 30,000 responses to their query.

That's perhaps why President Obama is expected to make a statement Thursday on the partisan standoff over how best to extend the expiring payroll tax cut, according to the White House. Obama will be joined by "Americans who would see their taxes go up if the House Republicans fail to act," the White House said. Some of those people have participated in Obama's social media campaign.

There was one surprise user of the hashtag: Speaker Boehner. But he used it to put things in his perspective, trying to explain why Republicans were right to try to work out a longer term deal.

[tweet https://twitter.com/SpeakerBoehner/status/149611555762343936%5D

[tweet https://twitter.com/SpeakerBoehner/status/149612691412107264%5D

So, with all of the bickering and the debating, we wanted to know if you agreed that $40 is a significant amount of money. We asked you if the end of the tax cut affect your family or if it would have little difference in your daily life. Here's what you said:

Selena Campbell is a 21-year-old from Orlando, Florida, who works in Admissions Control at Full Sail University. She said that the money she may be losing each paycheck would help buy new shoes for her husband. He has to walk to work every day because they can't afford a second car. But Campbell said that isn't the only thing it would help out with.

"For me and my family, $40 is $10 less than what we pay for groceries every week," she said. "There have been weeks, where we have only been able to spend $10 on groceries and have lived off of mac 'n' cheese and hot dogs."

Selena Campbell said the lost money would have helped with grocery and medical costs.

That money would also determine whether they could fully pay for their rent or car payments. It would also impact their healthcare, she said.

"$40 is what it costs for my medication so I can be a healthy wife, sister, daughter, mother," Campbell said. "$40 a month, in the economy we are in right now, is everything."

Tiffanie Young, a supervisor at a small rural hospital in Seaside, Oregon, says she saves $50 per paycheck for emergencies. The end to the payroll tax break would mean "I would probably have to stop doing that." She said that for a lot of people $40 could help pay for groceries, gas and other necessary bills.

But not everyone thought the delay would really impact them. And some people said they agreed with Republicans that a two-month extension wouldn't help.

Ryan Stoddard responded on Facebook that he felt just $40 a paycheck would mean "not much" to him and also agreed with House Speaker John Boehner that a short solution wouldn't help.

"Two months is a band-aid, not a solution," he said. "The Speaker is correct in his decision to call for more action."

Joel Jamison Bliss said on Facebook he was tired of seeing the story portrayed as "Republicans doing this to hurt the American people."

"A two-month extension does nothing and you know it ... this is another political ploy by Obama and more campaigning, which is all he has done for four years anyway," he said.

But Denise Mooren, a 36-year-old senior account who lives in Athens, Alabama, said her family would feel the hurt from the loss. Though it may seem like a small amount of money, Mooren said it is a "magical amount" in her household as she tries to make ends meet for her family of eight people.

"I pay $40 every two weeks for all the kids to buy their lunch, and I make them pack it the rest of the time," she said. "I had to purchase a Sam's Club membership just to make lunch items affordable for 15 lunches per week for three 11-year-olds, one 12-year old, and one 15-year-old."

She also said she needs that money for one of her children who has Attention Deficit Hyperactivity Disorder (ADHD)

"I pay $400 per month for insurance," she said. "The co-pays all went up double to $40 per visit. My daughter has to go at least 6 times per year."

One CNN reader, Jaimie, commented at how surprising it was to see people's bad finances and thought they were placing the blame on politicians.

"People need to learn how to budget, if you're seriously hurting for this $40 a month, you need to look at your finances," Jaimie said. "Don't blame the politicians for a lousy $40 a month. I support my wife and 2 kids off of one income and I make $30,000 a year, and we are never hurting. I set a budget and I keep it. Start a savings account for emergencies like these. Wake up people!!

Jennifer Alvich, a 36-year-old high school history teacher in Weehawken, New Jersey, said she is fed up with how politicians have handled many situations regarding her economic situation. The extra money she may not be getting each paycheck could pay for her bills, gas and groceries, Alvich told CNN

“I’m tired of reading about politicians who make decisions about the little money I have,” she said.

She said politicians are too focused on party lines and need to work together and stop hurting the middle class.

“This is about Americans getting through the year,” she said.

Melissa Matthews, a 32-year-old a stay-at-home-mom from Leander, Texas, said she works a job from home at night while her children are sleeping and her husband works two jobs.

Melissa Matthews is frustrated that the House has not passed an extension.

She said her husband just found out from his employer that he will be out $80 in January because of the standstill in Congress.

"They are messing with my family who can barely make ends meet," she said. "I am just very upset at the way the Republicans in the House are trying to manipulate this bill and get their way on other issues by threatening to take the payroll tax cut away. The extension needs to be passed and the other issues need to be worked out later. There is no more time to argue the issue. I appreciate the Senate passing the two-month extension and I want the House to do the same."

One commenter on our story, Gary, echoed a statement that many others made in response to some of the frustrations of possibly losing out on $40 a paycheck. He questioned whether everyone who was complaining was doing enough to live within their means.

"If this is a lot of money for you, cancel your cable bill and ditch your internet service. Get TV through the Air and internet at the library. I just saved you 120 bucks a month," he said. "Stop blaming the government for not helping you and look at what you can do to help yourself."

Frequent iReport contributor Egberto Willies says the payroll tax cut wouldn’t affect him personally because he works for himself as a software developer in Kingwood, Texas.

But he said everyone getting $40 could mean the difference between the “economy surviving or going back into a recession.”

Frequent iReporter Matt Sky, fromNew York, said the money would help in opening up the economy a little by allowing middle class American to pay off debt, car payments or buy groceries.

“The $40 bi-weekly would mean a lot for working class Americans," he said. "Wealthy folks, the tax breaks don’t really mean as much because they basically already have a lot money to meet their expenses."

Cindy Riley is a 54-year-old homemaker living in Center Point, Alabama. She said that $40 a paycheck for her family would help pay for several utilities or bills.

"$40 pays for our car insurance for a month. I can't cut that out, the law requires it. $40 pays for our water and sewer for two weeks. I can't cut that out either unless I want to start hauling water from the creek and build an outhouse," she said. "$40 will buy my vegetable garden seed for next spring. I suppose I could cut that out, but that would cost more in the long run, both in terms of health and just food.

"$40 pays for the Internet access for a month, and I suppose I could cut that out, but we have no other entertainment and I use it to pay all my bills and stay in touch with my family so that I can save the price of stamps. $40 pays for my pay-as-you-go phone for about four months. Can't cut that out, It's the only 'phone we have, we cancelled the landline long ago."

The money would also help with a new prescription she has to take, feeding her cats, health care for her family and the pets, or gas for her husband to get to work.

"We're about at the bottom of the barrel here," Riley said. "No, we've gone through the bottom of the barrel and it's really, really leaking."

We also put the question to our Twitter subscribers online, and you answered in force. Many of you said it could help with several small bills you had. Here's some of the responses you tweeted using the hashtag #40dollars about how much the money would or wouldn't help.

[tweet https://twitter.com/Krohn_DC/status/149857524248608769%5D

[tweet https://twitter.com/CAPRICECLASSIC5/status/149851340372320257%5D

[tweet https://twitter.com/AprilDlicious/status/149650391842304000%5D

[tweet https://twitter.com/SissonsTo/status/149257818250297344%5D

[tweet https://twitter.com/PtBrindley/status/149578268759175169%5D

[tweet https://twitter.com/WhySharksMatter/status/149856928653262849%5D

[tweet https://twitter.com/mattnocella/status/149240064432553984%5D

[tweet https://twitter.com/docstrangedub/status/149690011443412994%5D

What do you think? Would $40 impact you and your family, or would it barely impact you. Let us know by sounding off in a video on CNN iReport here. We'll be adding your thoughts throughout the day.

soundoff (1,741 Responses)
  1. Random Anonymous Blackmail

    So is the $40 a paycheck talking about a weekly, or bi-weekly pay period?

    $40 is just less than a weeks worth of gas. $40 is 1/4 of my weekly grocery bill, $40 is 5% of my rent.

    December 21, 2011 at 3:22 pm | Report abuse |
    • Rsprings

      Money is money...don't much care how you use it.

      December 21, 2011 at 3:31 pm | Report abuse |
    • Ron

      At least I see a few people who understand that this is actually a tax holiday that was "supposed" to create jobs. I got news for you it did not. It costs the country Millions of dollars a month to continue to extend the tax holiday. Each month causing the country to go deeper and deeper into debt.
      Tell me what the complainers were doing for the "missing" $40 a paycheck before the tax holiday? They were not getting it until recently. Yes the times are tough, but I thought the country was too.
      We need to start looking to pay down the debt, not continue to increase it year after year. And the people at the top are not the answer to every increase requirement. If you start taxing them, they will find ways around it that will likely make it worse for us as a nation.
      It is time for people to put on their Big Boy/Girl Pants and start taking some responsibility for their actions.

      December 21, 2011 at 3:38 pm | Report abuse |
    • sheehanje

      Ron, that is a line of crap. Really... What was I doing before the $40? Same thing I am now... just getting by. I haven't had a cost of living adjustment in years. Gas, Food, rent, everything has gone up. The middle class is getting weeded out, and I'm considered lower middle class. I already pay thousands in income tax each year. Again, I barely get by, and will have to downscale my family yet again. It's not just the $40, it's the economy tanking in general. But I guess I'm the problem because I work 2 jobs, try to support my family by living within my means...I used to think I was middle class, but that's changing fast... I guess we can finally go to the two class system that the republicans and democrats seem to want so bad.

      December 21, 2011 at 3:46 pm | Report abuse |
  2. joshw

    We here in the US have become insane..let me get this straight..acccording to many (read the right wing) a 3% increase to the most wealthy in a time of unprecedented low taxes would have caused all the so called job creators to leap off a cliff and the whole economy would have crashed but decreasing the tax on lower income people is not worth it and it is probably their own faults to be poorer than the 1%...and they probably have unrealistic wants such as a TV or internet access....the mosy amazing thing is how the right wing after the crash before Obama took office which proved that the unfettered unregulated free market is dangerous and every 3-7 years causes the economy to crash and the cronism that allowed a small % of people to amass such a disproportiionate amount of wealth to the detriment of the middle class which actually drives our economy to completelt reverse the argument and blame high taxes and too much regulation for all our problems..Bravo to the right wing and my sympathies to everyone else who they tread on and destroyed during the process

    December 21, 2011 at 3:22 pm | Report abuse |
  3. chris

    When does it end? $1000 this year, another $1000 we lose next year, and what the year after? Soon there will be no middle class, just the rich and the poor, with 5% of the nation in the wealthy and 95% living below the poverty line. Yes, we need to learn to live with less, appreciate what we have instead of buying more and more, but Congress continues removing tax incentives for the middle and lower class while leaving themselves out of the picture. This no longer is a Congress working for the people, they are working for themselves, still padding their own pocket books at the publics expense.

    December 21, 2011 at 3:23 pm | Report abuse |
  4. Chris

    Give me af'n break here. This is a tax holiday that is ending. Am i to believe tha taxes can never ever go up? I'm 100% or paying for this tax break, If you want unemployment foreve than quit your yapping andfork over the 40

    December 21, 2011 at 3:23 pm | Report abuse |
    • sheehanje

      Taxes have gone up.... Food has gone up... Gas has gone up... It's getting hard to get by. I have a family of 4. We have 1 car, and live modestly. We rarely eat out and entertainment is usually done at the home. We rent, and have talk about downscaling to be able to save up to buy a house. $40 a week is a big deal, especially seeing I haven't had any cost of living adjustment in the past 3 years at work. I don't want any type of public assistance, I just want to be able to live off what I earn. So ending the "Tax Holiday" means I need to downscale my life further, and it will mean that for millions. That money doesn't go back into the economy, and puts middle class families (especially lower middle class families, which I consider I am in) at a huge disadvantage. I usually don't complain too much, but this is devastating.

      December 21, 2011 at 3:34 pm | Report abuse |
  5. MSmith

    You know what $80 a month is to a single parent with a toddler...it's a case of pampers and a case of milk! Or it might just be the majority of the grocery bill line item in your monthly budget...or half of your gas bill to get you back and forth from your job that you're lucky to have because there are thousands out there without a job this year...meanwhile you're telling me that Lawmakers and Representatives have gone home to their families to enjoy the holiday....if I were to leave a project incomplete and just go on vacation I'd be FIRED!

    December 21, 2011 at 3:24 pm | Report abuse |
    • angryblkman

      don't forget $80 a month to a drunk or a smoker or a gambler. this will impact them too.! but you just keep throwing around diapers and milk, that's a typical left wing smoke job! get real!

      December 21, 2011 at 3:26 pm | Report abuse |
  6. angryblkman

    the people in line to buy lottery tickets. the people in line at the beer store. the people in line buying cigarettes. the people at the casino's who should not be there.

    these are all the people who will complain the most!!!!!

    December 21, 2011 at 3:24 pm | Report abuse |
  7. Drew

    I think that the payroll tax cut should be re-instated; After all – it was a temporary tax cut in the first place. The problem is that allowing this payroll tax cut disproportionately affects the poor as opposed to the rich. So in conjunction with the payroll tax cuts expiring, we should raise taxes on the rich (let's say people making more than $250K a year). I'm not exactly sure where the line lies, but there needs to be serious tax reforms that force the rich to pay a much higher percentage than they do. We tried cutting taxes on the rich and it didn't help the economy. The bottom line, though is that we can't keep cutting taxes across the board. The US Debt is at crisis level – and if we just keep cutting taxes, how is that going to help?

    December 21, 2011 at 3:24 pm | Report abuse |
    • bill

      Drew. Problem with your thinking. Most of the rich don't use Social security, but they still pay a portion of their income into it. This was a SS tax that was decreased. You are basically saying "I want the rich people to pay for my future retirement." That's insanity. That's socialism. That's .....communism.

      December 21, 2011 at 3:30 pm | Report abuse |
    • joshw

      Dear Drew,

      Stop being so rationale and logical ....start bowing to the 'job creators' remember that the middle class is a burden to the super wealthly with all our demands such as good wages, retirement plans, healthcare and perhaps a little extra to have a cell phone or an occasional vacation or even send your kids to college..if it wasn't for the pesky demands of the middle class we would not have these problems...

      December 21, 2011 at 3:35 pm | Report abuse |
  8. DavidB

    I think it was irresponsible of Congress to cut our Social Security taxes by a third when we all know the SS system is going broke as it is! I like tax cuts as much as the next person, but I also want the Social Security system to still be solvent when I'm ready to retire and start drawing my own SS. This was a "temporary" tax cut that should have never happened!

    I'll bet that by now 90% of Americans have forgotten where this boost in their paychecks came from, and of course now they'll howl if it ends. I took the money and just applied it to my mortgage principal and other debt, something I can stop if the SS tax goes back up; so I won't be feeling the pain if the tax rate goes back up to 6.2%. I'm sure that's not what the WH and Congress wanted me to do; they wanted me to buy more "stuff" instead of paying off my debts.

    And this is a great election-year ploy by Obama; he'll claim the Republicans are "raising your taxes" if they don't extend this reduction in Social Security funding, and he'll claim that he, all by himself, reduced the voters' tax burden if it is extended. He wins either way, thanks to a primarily uninformed electorate.

    December 21, 2011 at 3:25 pm | Report abuse |
    • Heath

      You completely nailed it! I've never heard so much whining over money we should have never been given (or counted on). We're drowning in our own greed and selfishness. Let this foolish tax holiday expire.

      December 21, 2011 at 3:47 pm | Report abuse |
  9. Old Fashion

    Republicans and Democrats need to get their a.. together and do what the people want. For some of us $40 don't mean sh.., but for those single parents and others making minimum wage, it will hurt a lot. For myself no, the kids are gone and I have a empty nest, but I also pay about $50 per week for gas and that's from home to work, if I decide to go somewhere then I need to refill before the week is out, so stop the bullshi. talk and come down to earth people.

    December 21, 2011 at 3:26 pm | Report abuse |
    • angryblkman

      about half pay no taxes at all. how will this effect them?

      December 21, 2011 at 3:32 pm | Report abuse |
  10. OregonMan

    It means my monthly transit cost to work..half of which is paid by my employer. Its like my raise was zero.

    December 21, 2011 at 3:27 pm | Report abuse |
  11. njreader

    food for two weeks

    December 21, 2011 at 3:29 pm | Report abuse |
  12. Rsprings

    A round of Golf and lunch.

    December 21, 2011 at 3:30 pm | Report abuse |
  13. bill

    i work overseas for halliburton when im working...i dont pay taxes....

    December 21, 2011 at 3:31 pm | Report abuse |
    • Lilo

      Can you hook me up with a job? I really need one.

      December 21, 2011 at 10:07 pm | Report abuse |
  14. Guapo

    Great to see all these pictures of "struggling" people... taken from cellular phones...

    December 21, 2011 at 3:31 pm | Report abuse |
  15. ace

    Payroll taxes = Social Security Funding Contributions. (Stop calling them payroll taxes). We need to fund social security in order to ensure that the benefits are available for the people who have paid into the system for many years. I am sure if the administration and congress called this a "social security funding cut" it would get less support.

    December 21, 2011 at 3:32 pm | Report abuse |
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