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.


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.



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.









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. MAC

    If you are not willing to pay your fair share for social security and medicare, you do not deserve them. That is what payroll taxes are for!

    December 22, 2011 at 1:15 am | Report abuse |
    • Dan

      They are NOT talking about a cut to FICA, which is what YOU pay and which is your contribution to Social Security.

      They are talking about a cut to the per-employee tax paid by employers.

      See, the politicians are betting on the public being naive enough to believe that corporatiohs will pass that tax cut on to the employees. They never have. They never will.

      And you can rest assured that when the tax break ends, the employers WILL pass the added cost on to their employees AND customers. They always have. They always will.

      December 22, 2011 at 3:08 am | Report abuse |
  2. Melissa

    Really? No one told you to go to college and talke out loans, no one is making you get cable or Internet each month, and no one forced you to have children you can't afford. Take responsibility for your self and your decisions... Every one wants to complain about the taxes but think about ALL the government services you use yearly.... Next year vote!

    December 22, 2011 at 1:22 am | Report abuse |
  3. pooli

    Kids are only for the well off bc they will likely help advance society. Poor people only hold science back and prevent us from getting off this planet before the muslims take over

    December 22, 2011 at 1:24 am | Report abuse |
  4. EastWorryNot

    It can be understandable that $40 would be concerned to you people when having financial difficulties or whatever it is. I wish you could join my company that you won't have much big worries or concerns.

    December 22, 2011 at 1:38 am | Report abuse |
  5. JP

    Less than 10 gallons of diesel fuel in my truck. Not much these days, to be honest...nice little ad campaign to show you care though.

    December 22, 2011 at 1:39 am | Report abuse |
  6. tallulah13

    I'm already taking a pay cut at the beginning of the year. (3rd in two years.) Pretty soon I'm going to be paying to go to work.

    December 22, 2011 at 1:40 am | Report abuse |
  7. nathan

    honestly i dont make much money because well the economy sucks. BUT if it helps get us out of debt and actually help the economy recover why not give a little extra. because when the economy is better i could actually get a good job

    December 22, 2011 at 1:43 am | Report abuse |
  8. WithinOurBudget

    $40 is a lot to lose each week. But I honestly believe most of us can cut back on the "wants" in our lives and concentrate on the needs. I happen to know of friends who have gone out and gotten a dog and a cat and now complain that they do not have enough money for groceries and utilities. Re-look at your priorities. Yes, pets are wonderful to have, but you need to be realistic about your budget also.

    December 22, 2011 at 2:02 am | Report abuse |
  9. WithinOurBudget

    Oops! I mean $40 a month not a week...probably what some people spend on lunch or dinner out each month.

    December 22, 2011 at 2:09 am | Report abuse |
    • The Complainer

      WOB, it's $40 per week, not month. It's a car payment. It's a couple of winter coats. An electric bill, a cable bill, 4 pairs of good kids shoes, a trip to the dentist.... per month. it's the continuation of massive tax breaks for billionaires and the loss of CRUMBS for everyone else.

      December 22, 2011 at 2:31 am | Report abuse |
    • lawfan

      Yeah, $40 a week means earnings around 100K a year!! and if you are pulling that kind of cash 40 isn't going to matter much

      December 22, 2011 at 2:50 am | Report abuse |
  10. Amistavia

    Having a hard time making ends meet with 8 kids...hmmm...maybe you should have bred less.

    December 22, 2011 at 2:43 am | Report abuse |
  11. Tee

    My house value is $80,000.00,, I owe 210,000.00 because house value dropped. I am deciding to give up because the only way I could make payment is to work overtime. I get stressed out if we don't have overtime on our next pay check otherwise we have to eat at the foodbank and save the money for the house payment. $40 can buy rice and chicken that can last us a month or our gas money. Is this AMERICAN LIFE??????????? REALLY????

    December 22, 2011 at 2:54 am | Report abuse |
    • Amistavia

      Perhaps you shouldn't have purchased a house that you can't afford. The American Dream isn't a promise to reward the financially illiterate. If you had any sense of honor or duty to your family, you'd get off your lazy @ss and get a second job.

      December 22, 2011 at 3:00 am | Report abuse |
  12. Susan

    40 bucks a paycheck is a big deal to me.

    December 22, 2011 at 3:18 am | Report abuse |
  13. yannaes

    I am a retired teacher. $40.00 to those of us of whom worked means a great deal for that $40.00 goes to pay for an illegal that has not done one bit of work, just sponge off of my 40,00 bucks. Sorry liberals.

    December 22, 2011 at 3:36 am | Report abuse |
  14. John

    Extortion is extortion, period. There are extortion rates on everything. It's rather sad that if a person works his ass off to get rich for say, he has to have a bunch of turds deciding what he'll do with his spoils. I could careless about the corporations & the rich. They are the goals I'm aiming for.

    People should be able to choose, not be pressured by other crappier humans. As for government services, I would never use them. I'd rather die than depend upon a crappy system designed for the helpless & lazy.

    December 22, 2011 at 4:01 am | Report abuse |
  15. Kevin

    $20 a week doesn't mean a single thing to me. Yeah I would like more money, but I currently live WELL below my means. I could lose my job and live fine for a year easily. I don't have a flat screen TV, nor a fancy car. I don't smoke anything, I'm not a fan of alcohol. I often cook my own food rather than eat out. If $20 a week is a big issue to you, you've failed budgeting 101 a long time ago.

    December 22, 2011 at 4:09 am | Report abuse |
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