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. Farm Girl

    There's nothing hypocritical about wanting an equal tax burden.

    December 21, 2011 at 9:13 pm | Report abuse |
  2. Brittany

    Okay how many people in this forum is rich? Dont worry I'll wait...................

    December 21, 2011 at 9:13 pm | Report abuse |
  3. Tiffany

    $40 a paycheck is confounding. I ask where the money comes from, I ask which program Social Security or Medicare is getting looted to pay for it. I ask how we can have tax cuts and not tax hikes and how this revenue will be made up. I ask if we need this $40 now, how much more more we may need it in the future. I ask for jobs, progress, hope, but right now, no more handouts.

    December 21, 2011 at 9:18 pm | Report abuse |
    • b

      it's not coming from your paycheck it's coming from your retirement and your kids future.

      December 21, 2011 at 10:03 pm | Report abuse |
  4. Brittany

    You not asking for a handout. This money is coming out of your paycheck. No more bailouts

    December 21, 2011 at 9:23 pm | Report abuse |
    • Tiffany

      The money is not coming out of your paycheck. It is being added to your paycheck.

      December 21, 2011 at 9:35 pm | Report abuse |
  5. Al Cormier

    Rather than affect the working class, how about cutting back on the number of times the President uses Air Force One to fly all over the world. We have access to the internet and I'm sure someone can figure out how to use a video camera instead of visiting in person with leaders from other countries. Is this really necessary? Maybe this would show that the government really cares about us, and cut back on his vacation to Hawaii, which has been reported to cost $4 MILLION dollars. Most Americans cannot afford a vacation period. What's up with that? Let the Politicians take a pay cut. Is what they're doing really helping the economy? They don't seem to worry about it

    December 21, 2011 at 9:26 pm | Report abuse |
  6. Kim

    It really is disgusting that Congress doesn't care about the US citizens. The water is up to our noses and it's not stopping! Property taxes going up- utilities going up- insurance costs going up (if you are lucky enough to have it!)-grocery bills, up. Where does it end. OF COURSE $40 MEANS ALOT to tons of Americans at this time. Could they please agree on something and help us out once and for all? They make tons of money and really don't care........it's a sad story!!

    December 21, 2011 at 9:27 pm | Report abuse |
  7. letssee

    How about the amount I would gladly pay for defict reduction if I thought they wouldn't spend on something else.

    December 21, 2011 at 9:28 pm | Report abuse |
  8. alinnc

    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."
    Right. Let's move half the population back to the 1950's. Corporations are pushing the middle class out the middle class. Between stagnant wages, lay offs, higher health insurance & health costs, higher gas & utility prices, what was a reasonable income 10 years ago becomes barely livable income today. Yet the investment bankers & CEO's continue to get huge bonuses. Are they really creating anything or just shuffling money around and outsourcing jobs?

    December 21, 2011 at 9:32 pm | Report abuse |
  9. tif31

    I'ts all fine if you happen to be an individual who can afford more money coming out of your paycheck. But the average worker who has had no pay increase in the last ten years, it's means a whole lot more. It's not a matter of not trying to do better, it's more a matter of job market issues. How many college graduates do you know who have had to settle for low paying jobs ? Me, I know quite a few. So for those of you who have had fortune smile upon you, congratulations. But don't you dare look down on the rest of us.

    December 21, 2011 at 9:36 pm | Report abuse |
  10. Brittany

    BAILOUTS FOR THE RICH AND HIGHER TAXES FOR THE SUFFERERS (LOW AND MIDDLE CLASS). So low and middle class would have to change their lifestyle, but the high class wouldnt? Really? The rich are not worried about 40 dollars to their paycheck. In fact there is proplably no one in this forum rich.

    December 21, 2011 at 9:39 pm | Report abuse |
  11. Brittany

    How many people in this forum rich?..........................dont worry I'll wait...........

    December 21, 2011 at 9:41 pm | Report abuse |
  12. RJ

    Folks, it's not $40 a week for most of us. You'd have to be making over a hundred grand a year before the increase is that much. For minimum wage people, it's $6-$8 a week. Being that a pack of cigarettes is around five bucks, is this really such a big deal? And this is Social Security money... you know, the system that is going broke, and is obligated to support these same wage earners when they're old? I think both parties are wrong. This tax cut never should have happened in the first place.

    December 21, 2011 at 9:42 pm | Report abuse |
    • Jaime

      Totally agree with you RJ! Tax cut should have never happened!

      December 21, 2011 at 9:45 pm | Report abuse |
  13. Jaime

    People need to learn how to budget, if you're seriously hurting for this $40 a month, you need to look at your finances. 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!!

    December 21, 2011 at 9:44 pm | Report abuse |
    • Sarah

      You obviously have never tried to live on minimum wage. People are hurting - it cuts across all families. People in their fifties have lost their retirement through the crooked stock market and banks pay no interest on money saved. College graduates are living with parents due to the lack of jobs. Most of us would notice a five dollar difference in our pay checks.

      December 21, 2011 at 9:54 pm | Report abuse |
    • b

      Amen, Jamie. live within your means......and for all you CNN believers, 2% of 40 hours @ minimum wage is $5.80/week. Don't believe the lies that CNN prints. They are basing the $40 on a $2000 paycheck. $40 sounds mighty nice, but you have to make 2 grand to get $40.

      December 21, 2011 at 10:09 pm | Report abuse |
  14. Brittany

    No you wake up! Why do you think people are as fortunate as you are?

    December 21, 2011 at 9:48 pm | Report abuse |
    • Jaime

      It's not called being fortunate... it's called budgeting and a savings account!

      December 21, 2011 at 9:49 pm | Report abuse |
  15. sololady

    Um....who's doing the math on this stuff? If the details of the original tax cut haven't changed, the tax cut is 2% of pay, and it's a reduction of FICA (social security tax).

    2% means two dollars on a hundred. So, if my math is right, to have a $40 tax cut on a weekly check, you have to be making two grand, or more than $100K year. Hey, if you make that much and miss $40, give up Starbucks!

    And on top of that, we're already hearing about how Social Security is going broke. So, how does it make sense to decrease money that's being paid to fund it? Doesn't that just mean Social Security goes broke faster?

    This tax cut is so small that most people never noticed they were getting it. It really does nothing but stimulate the economy (a little); not a bad thing, but it's not the big deal to individuals that the press and politicians would have you believe. There are much more important things to individuals in the "tax cut" package than the two percent!

    Articles like this kind of reinforce the charges frequently made that CNN is just a propaganda tool now.

    December 21, 2011 at 9:48 pm | Report abuse |
    • Lilo

      Good points. Thanks.

      December 21, 2011 at 9:56 pm | Report abuse |
    • b

      "propaganda" is being nice. they are outright liars. for all you people thinking you are getting $40, you have to make $2000.00 a pay period to get $40. how many of you minions make $2000.00/pay period?

      December 21, 2011 at 10:13 pm | Report abuse |
    • Steve

      I think your math would be correct if they were talking about $40 per week, but if you take 1,000 and divide it by 40, you get 25. I guess they're splitting the difference between bi-weekly and bi-monthly pay periods (which are probably the two most commonly used pay periods) to get a nice round $40 figure. The actual math for a bi weekly paycheck would be $38.46 per paycheck. For a bi-monthly it would be $41.67. $1,000.00 is 2% of $50,000.00. That's the average income that would lose $40 per paycheck.

      December 21, 2011 at 10:15 pm | Report abuse |
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65