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. Jenn

    $40 a paycheck, while it won't completely break the bank it sure doesn't help, I can reduce the amount I put away for retirement. But what really irks me is seriously the republicans have sat there and fought raising taxes on the wealthy with the excuse it will break the economy. SO if they can't afford more taxes, how do they figure it's ok to mess with my taxes just to spite Obama. What exactly is that going to do to the economy? Awesome job Washington is doing as a whole right now....

    December 21, 2011 at 2:08 pm | Report abuse |
    • NOT MY CHAIR

      anything the democrates want to the GOP will go against. it makes complete sense

      December 21, 2011 at 2:11 pm | Report abuse |
    • abac4

      Well, they did say they're work is done. All that's left is for them to finish the job. My guess is that they have no clue what $40+- means to many people.

      December 21, 2011 at 2:26 pm | Report abuse |
  2. Petet

    where are the people railing against gutting Social Secuity, because that is exactly what we are doing (which most responders seem to favor)

    December 21, 2011 at 2:09 pm | Report abuse |
  3. connie

    The goverment needs to stop taking all of our damn money.. We don't get raises as the companies are cutting back...then if the damn goverment takes more..what is left... You need better people in the office to manage the budget...it's not our fault that the goverement screws up... why should we suffer!!!!

    December 21, 2011 at 2:10 pm | Report abuse |
    • Marshall Tucker

      You dont pay enough tax, no American does and that is your fault... Americans complain even as we enjoy the lowest taxes and gas prices on the planet..

      December 21, 2011 at 2:11 pm | Report abuse |
  4. Marshall Tucker

    A massive increase in tax is needed...Americans dont pay enough. Look at the rest of the world, they pay significantly higher taxes and their debt is not out of control. Americans consume alcohol, smokes, drugs and comlplain their broke. Your morally broke as your kids starve and you feed your addiction. Taxes should be increased 10-12% and no more wasteful spending.

    December 21, 2011 at 2:10 pm | Report abuse |
    • NOT MY CHAIR

      Americans consume alcohol, smokes, and drugs but i dont complain i am broke. its called having a budget and living within your means

      December 21, 2011 at 2:14 pm | Report abuse |
    • Waylon Jennings

      Yeah genius...and those countries also have free health care and other perks that paying 50% in taxes gets them. What are we getting for 33%? Not much.

      December 21, 2011 at 2:20 pm | Report abuse |
    • Lisa

      You're an idiot cheapo Republican....and other countries health is universal and free not like here. And I don't smoke, abuse alcohol...I'm just a middle class blue collar worker struggling to get buy and secure my future somehow.

      December 21, 2011 at 2:36 pm | Report abuse |
    • r schier

      You're 100% certified idiot material – 'nuff said.

      December 21, 2011 at 6:02 pm | Report abuse |
  5. Dan C

    Half of the people commenting don't even know what they are talking about. It's not $40 a week! It's not $40 a month! It's $40 per paycheck or $80 a month. Do the math ($1000/12 mo= $83 per month). It's $20 a week or $80 a month.

    The math skills of this country are more concerning to me than this payroll tax issue.

    December 21, 2011 at 2:10 pm | Report abuse |
    • NOT MY CHAIR

      its intelligent people like these that are needing the $40

      December 21, 2011 at 2:13 pm | Report abuse |
    • Jim

      Actually, it's 2% of one's income, not $40 or $80. People here who are making $10/hour and think $40 is 2% of their paycheck clearly don't have a fundamental understanding of SS or of this issue. Then again, I'm not surprised by apparently more than half not knowing how to figure something so simple as what 2% of their earnings is- this is a CNN forum, after all.

      December 22, 2011 at 12:09 am | Report abuse |
  6. Theresa

    It will affect me greatly as I earn a low income and that 40 will force me to choose between having food to eat or buying gas to get to work. Congress (both houses and both parties just do not get it! ugh!)

    December 21, 2011 at 2:10 pm | Report abuse |
    • Marshall Tucker

      Get a second job... If your working under 12 hours a day, 7 days a week I have no sympathy for the lazy.

      December 21, 2011 at 2:13 pm | Report abuse |
    • SixDegrees

      First, the amount per paycheck is under $20 on average; the article confuses "per family" with "per paycheck". Second, if you're a low-income earner, the amount is even less, because the reduction is indexed to the already-bracketed tax tables. A good test: did it make any difference to you at all when it was enacted in 2008? At the time, it was criticized roundly for being too small to have any impact on the economy or on people's budgets.

      December 21, 2011 at 2:20 pm | Report abuse |
    • bill

      What did you do last year before you had the temporary tax relief?

      December 21, 2011 at 2:25 pm | Report abuse |
    • suicide

      If $40 is really going to break your bank; suicide is a real option. Don't think about it, just leap out a window. Maybe drive your car off a bridge. It boils down to decisions, you have chosen to make crap decision after crap decision and now find yourself complaining over $40. Make a good decision for once. Suicide, your first best choice.

      December 21, 2011 at 7:06 pm | Report abuse |
  7. NOT MY CHAIR

    these people are stupid.... i am sorry, how about a life plan? like oh maybe we cant afford to have children? maybe we shouldn't have bought those pets? if forty dollars makes or breaks you did something wrong. i agree with passing the payroll tax cut, but come people make better life choices.
    $40 out of my paycheck would mean i drive to PA to buy my tobacco. people need more than $40 to help stimulate the economy

    December 21, 2011 at 2:10 pm | Report abuse |
    • SallySue

      A life plan? Like going to college on scholarships and working full time and graduating with honors? Like getting a job teaching in a public school and working as a waitress on the side to help my mom? Like waiting to get married and have kids until I know I can pay for them? I live and work responsibly, but $80 a month is more than I pay for groceries because I shop generic and coupon like heck. It's more than I pay for gas because I chose to live in a somewhat sketchy area to save money on gas. I have a great life plan, but $80 is significant. I'm glad you're fortunate enough to be dismissive of it, how about being grateful to be in a place in your great life plan that it doesn't matter to you, instead of making assumptions about people who it does matter to.

      December 21, 2011 at 2:48 pm | Report abuse |
    • Realisticdude

      I agree with you completely. Live smart.

      Sallysue, it seems you are on the right track but are a little bitter about it. One day in the near future you will be one of the fortunate. I started with nothing, and now could be considdered one of the fortunate... And I like you had to battle a lot of tough times to get here. Stick with it.

      December 21, 2011 at 4:01 pm | Report abuse |
  8. elb1999

    No one seems to remember that this reduction was supposed to be temporary. What were these follks doing before the reduction? And what will they do when the reduction eventually expires?

    December 21, 2011 at 2:12 pm | Report abuse |
  9. AJ

    Am I missing some math here? It's a difference of 2% on social security – right? The 'average" person makes $2000/wk? If that's what they make, then $40/wk isn't going to make a difference. Even if the "average" person makes $800/wk, that's $16...

    December 21, 2011 at 2:12 pm | Report abuse |
    • NOT MY CHAIR

      its out of a paycheck which in most cases are bi-weekly

      December 21, 2011 at 2:16 pm | Report abuse |
    • Al

      Hey Aj,
      I agree with you, I am so disapointed with CNN poting statements that don't make sense. Earier they posted someone's response saying that $40 is equal to me working 5 hours. Well if that was the case that person would not be looking at a tax increase of $40 per weel, assuming he had no dedcutions the most he would incur is about $6.50 per week.
      They don't help get the correct message out, they have been making it sound like everyone would incur a $1,000 at the first of the year.. Very sad the state of reporting.. And then they have the gall to use the truth meter on the politicians. What we need is a news protest, and have the talking heads get it right!

      December 21, 2011 at 2:25 pm | Report abuse |
  10. Michael

    Sounds like people are starving because they don't have enough to buy food. In that case why don't they just eat less. They look fat in the pictures.

    December 21, 2011 at 2:13 pm | Report abuse |
    • Waylon Jennings

      They likely aren't fat because of overeating. They are likely fat because the foods that lower income people are forced to eat are horrible for you.

      December 21, 2011 at 2:23 pm | Report abuse |
  11. SixDegrees

    It's roughly $1000 per family – not per paycheck. The hit per paycheck is somewhat less than $20; considerably less for low-income earners. In fact, when this tax decrease was passed in the waning days of the Bush Administration, Democrats and economists criticized it because it was too small to make any significant difference to the economy. It's difficult to understand why its overdue repeal is so alarming now.

    December 21, 2011 at 2:15 pm | Report abuse |
  12. duh

    "$40 per paycheck" which is typically every two weeks so $80 month and amount depends on your earnings to. The lack of protecting it's citizens from unfair business practices and help from our elected officials and lack of empathy from corporate thugs is truly saddening. Go ahead and keep screwing us, someone will snap eventually.

    December 21, 2011 at 2:16 pm | Report abuse |
  13. C Tran

    Forget about the 40 dollars, how about the trillions wasted on stimulus packages, over 500 millions taxpayers money spent on bail out Solyndra. The Solyndra deal called for Solyndra investors to be paid first before taxpayers if Solyndra bankrupts. Let's keep things in perspective, Obama did not rant and rave when he and his administration got duped into bailing out Solyndra but he did not miss any opportunity to blame GOP, especially after he boasted about his ability working across the aisle when he ran for the White House. Evidently Obama said anything to get elected.

    December 21, 2011 at 2:17 pm | Report abuse |
  14. Change

    See, all this was planned by the teaparty controlled House. I find it outrageous that while Republicans in the Senate can come on board with Democrats to pass this legislation, the teabags in the House can't find any sensible reasons to do the same. But this was all planned by the teabag controlled House that saw how the unemployment rate is declining and how the economy is improving. So what better way to stall progress going into the new year by refusing to vote on this bill. This is a joke and a slap in he faces of struggling and hard working Americans in an economic crisis that was created by the rightwing leadership in congress.

    December 21, 2011 at 2:17 pm | Report abuse |
  15. Really Now?

    Shut up, Marshall Tucker. You are the ultimate troll, aren't you?

    December 21, 2011 at 2:17 pm | Report abuse |
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