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. Eric

    It's not about the $40 every two weeks. It's about the hypocrisy that the republicans continue to display, when tax cuts for the wealthy don't have to be paid for, but tax cuts for the middle class do. When extending the bush-tax cuts for the wealthy is a priority, but extending middle class tax cuts isn't. The party of tax cuts supposedly. Obama has cut more taxes than any president in modern history.

    December 21, 2011 at 5:53 pm | Report abuse |
    • skarphace

      I agree. Both tax cuts should end.

      December 21, 2011 at 5:58 pm | Report abuse |
  2. Army54

    To Lu – You want $160 for the next two months. I'd rather have some Social Security benefits that I've worked for and have earned. It's folks like you who are helping deplete the system for your instant gratification. Thanks dear.

    December 21, 2011 at 5:56 pm | Report abuse |
    • Steve

      Right on! Coming from a 30 year old. Live within your means people!!!

      December 21, 2011 at 6:06 pm | Report abuse |
  3. Steven

    Our politicians have become an embarrassment to our country. They are in a whole different tax bracket than the people they are supposed to be representing!
    The protesters in other countries need to be careful what they wish for!

    December 21, 2011 at 5:56 pm | Report abuse |
  4. Lori

    "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."

    Yep...exactly. The people making over 250K per year should just stop asking the government to help them by keeping their taxes ridiculously low since $40 to those folks is apparently no big deal. Wealthy people should seriously consider not eating prime cuts of meat and driving gas guzzling cars and really...stop crying about the lowest tax rate this country has seen since 1992. Speaking of which...does anyone else find it interesting that every time the top tax rate is decreased, we have a recession?

    December 21, 2011 at 5:56 pm | Report abuse |
  5. Stiles

    I make only $30000 a year since my wife had to stop work because of health issues. $40 less a week would stink but we would make do. Still what I make is not enough to get by now so $40 less wouldn't suck any more. I imagine the cost of living in general will go up during that time anyway. We don't waste and pay our bills but it really sucks when your kid asks to join wrestling and you can't because the cost of gas to take him cuts into my gas fund for work. The fund used to be only $20 every two weeks now I spend $50 a week because of the BS OPEC is putting us through. My pay hasn't gone up but the cost of living has. How about the corporate world paying it's employees enough to live on rather than making us just "get by"

    December 21, 2011 at 5:56 pm | Report abuse |
    • skarphace

      Your math is wrong. With an annual salary of $30,000 ($577 per week), your savings from this would only be about $12.11 per week. This at the expense of defunding Social Security which you may want when you retire.

      December 21, 2011 at 6:01 pm | Report abuse |
    • Adam

      Only $30,000...
      That's quite a lot to some working minimum wage...

      December 21, 2011 at 6:12 pm | Report abuse |
  6. factualfact

    40 dollars means absolutely NOTHING to ANYONE in CONGRESS why??? Simply because they are in Congress and they play by another set of rules. Who are we fooling here this is not a Republican or Democratic issue it's a Congress issue. Very very few who are in Congress actually know what's really going on in the rest of the real U.S.

    December 21, 2011 at 5:58 pm | Report abuse |
  7. Army54

    As has been stated before: the $40 a paycheck is from an annual salary of $52,000. The equates to a 40 hour week @$25 an hour. If you ain't making $25 / hr you're not going to lose $40 a check.

    December 21, 2011 at 5:59 pm | Report abuse |
    • skarphace

      As long as you are assuming biweekly or semimonthly paychecks (not weekly or monthly), then your math is good.

      December 21, 2011 at 6:03 pm | Report abuse |
  8. Kim!

    If they made the cut permeant, $1000 per year over the next 25 years (the time until I reach retirement) would probably be close to $40K, perhaps more depending on the investment. That would help pay for the medical expenses that I will incur when I retire with the new "privatized medicare" they are voting in. The money saved is also money that I control instead of money that I hope the government gives me someday. When you look at it over a lifetime of reduction, it becomes quite significant for the future.

    December 21, 2011 at 6:00 pm | Report abuse |
  9. Army54

    Stiles – you'll be out $11.50 a week.

    December 21, 2011 at 6:01 pm | Report abuse |
  10. Snookie

    Just remember they couldn't ask the ultra wealthy to give up $40 a week or even $100 a week but they have no problem taking more from the average working person. I knew that is how it was going to play out because it always is that way.

    December 21, 2011 at 6:02 pm | Report abuse |
    • skarphace

      I still don't understand that argument. How is it taking more when they were taking it to begin with? The same argument is used by Fox sheep to claim that ending the Bush tax cuts would amount to a tax hike.

      December 21, 2011 at 6:04 pm | Report abuse |
    • Mark

      Just exactly how do I take money from you. I make good money. I work 6-7 days a week. I have a huge SBA loan that I have to pay or lose everything. I work hard and deserve my pay. What the he.ll do I take from you. The govenrment takes 35% of my corporate income. So lets say I make $1000 dollars. $350 gone for Fed and $60 state. Leaves $590 now I want to take that money home, I have to pay another 35% Fed and 6 % state personal income taxes. Um sounds like double taxation to me. Leaving me $349. Now you see why corporations hold on to cash. So I earn 35% of my hard earned income after Fed and St double taxation. And you want more...I only have 100 employees and 10% of those are gone in January to help pay for more govenment regulation expenses on small business. I'm sick of the Feds and moochers taking me and my hard work for granted.

      December 21, 2011 at 6:48 pm | Report abuse |
  11. Frosty18

    As an Canadian, I find it funny that those same GOP supporters who argued against the expiration of the tax cut for the rich because of how it would take their earned money away, and reduce jobs because of this lack of money in the economy, all the while saying the government needs to get out of the pockets of Americans. Now, when it is not the rich, it is OK for the government to pick the pockets of America. You go as far as to suggest how these people, on the thinnest of budgets, can tighten their belts! You assume that a person must be lazy and greedy to have $40 be that critical. I would do fine with $40 less a pay, but by the grace of God go I. It is hard to believe you cannot see your contradiction.

    December 21, 2011 at 6:03 pm | Report abuse |
  12. Daniela

    What about donations to charities or church???????
    No one seems to be thinking about this...

    December 21, 2011 at 6:06 pm | Report abuse |
  13. chuck creig

    Woo-hoo! An extra $40 a week? Nooooooooooiiiiiiiiiiiiiiice. Puttin a down payment on the Boca condo tomorrow and getting that Jaguar XF now!

    December 21, 2011 at 6:08 pm | Report abuse |
  14. Guest

    Neither of the two parties is working for us any longer. Wake up America, it's time to find a 3rd party solution!

    December 21, 2011 at 6:08 pm | Report abuse |
  15. sgtsam2005

    40 bucks is a slap in the face.. your takeing it out of your back pocket{ social security} and putting the little bit in your front pockett what little bit you would be getting in your golden years, but i belive those golden years are now tarnished and dull.. wake up people, this is just a feel good ruse . and that 40 dollars is baced on if you make 50000 or more. so a lot of people would be getting a lot less

    December 21, 2011 at 6:09 pm | Report abuse |
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