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. Becky

    Not only would I be loosing out of $40 per pay my health insurance is going up an extra $30 per pay as well. So really I will be out $70 on an already tight budget with little frills.

    December 22, 2011 at 9:35 am | Report abuse |
    • Bubba

      if a 2% tax increase cuts $40 from your weekly paycheck, you make more than enough money to pay your insurance etc.

      December 22, 2011 at 9:39 am | Report abuse |
    • Becky

      It is a bi-weekly pay check. And no that isn't true when your the only one working because your partner got laid off and is at school working to learn a trade.

      December 22, 2011 at 9:42 am | Report abuse |
  2. nmbskl

    I love seeing all these "holier than thou" people who are financial wizards and have never struggled a day in their lives, telling everyone else how they should run their lives & money. Good for you that you have money, but there are millions of people who don't have it as easily, and need every dollar they can get.

    It's ridiculous that we're here talking about how struggling people don't need a tax cut because they don't really notice the extra money, and if they had $40 extra, they don't know how to use it. But when the conversation turns to the richest of the rich paying a tiny bit extra, that is the most important "extra money" in the world, and without it, the economy would collapse and the "job creators" would close their businesses... utter garbage. It is such a 2-faced, hypocritical argument, it makes me sick.

    December 22, 2011 at 9:35 am | Report abuse |
    • Johnny

      It's not your place to exact more payment from "the rich" just because someone has less, particularly if they did not acknowledge the realities of not living beyond their means in the FIRST place. Property rights are core to freedom. Freedom trumps redistributionist naivete.

      December 22, 2011 at 9:38 am | Report abuse |
    • Nomma

      What a crock of democratic propoganda. Fix the whole tax system as proposed by the republicans and solve the problem instead of jst can kicking it down the road like the lame senate so they could get home for the holidays.. Our troops miss christmas this bunch can also and help the nation if they have the guts.

      December 22, 2011 at 9:39 am | Report abuse |
    • Goose66

      What about basic fairness. Does that make you sick too?

      December 22, 2011 at 9:49 am | Report abuse |
  3. Johnny

    What I would like to know about these people is, what was their financial situation before the recession. Were they leveraging lifestyles beyond their means with credit cards? Did any of them get into a mortgage where they planned on living paycheck to paycheck after COE?
    And for the people with 8 kids: STOP having so many kids. You cannot afford it.

    December 22, 2011 at 9:36 am | Report abuse |
  4. Nomma

    Actually fixing he problem in a sustained way would be a lot better and the republican would offer a lot more to these people than $40. Too bad the democratic propoganda machine is so effective! GO TEA PARTY

    December 22, 2011 at 9:36 am | Report abuse |
  5. Bubba

    $40 per week? What a bunch of liars Congress and the President are. None of them tell the truth; all they do is scare people who have no clue how much 2% of anything really is.. How many of us make so much money that 2% tax increase will cut our checks by $40? Every $100 in payroll per week generates $2 in extra tax, so how much would you have to make to generate $40 a week? $1,000 a week in salary generates only $20 in taxes, so you think someone making more than twice that kind of money is going to miss $40?

    December 22, 2011 at 9:38 am | Report abuse |
    • Gus

      I make quite a bit on salary, though not quite double what you were saying, and yes I will definitely notice a 2% increase on my taxes. I have to budget 1-2 paychecks in advance just to make sure I will have enough for the month.

      December 22, 2011 at 9:54 am | Report abuse |
  6. Goose66

    It strikes me as odd that not one person (at least reported) was concerned about the fact that there is less money going into the Social Security fund. That money has to be made up, which will come from the 50% of working Americans that pay all the income taxes. Sure, if I am in that lower 50%, since my income tax is $0, let's start reducing the payroll tax too, so that eventually I will be paying nothing for all the Government benefits I received while the upper 50% pays for everything. That's fair, right?

    December 22, 2011 at 9:38 am | Report abuse |
  7. Bob Boulais

    40 x52 = 2080

    December 22, 2011 at 9:38 am | Report abuse |
  8. nonyabidness2

    40 bucks is 960 approxiametly if you take into account of being paid twice a month. That is alot of money, Forty dollars can go a long way when that is all you have...

    December 22, 2011 at 9:39 am | Report abuse |
  9. alleycat

    $40 dollars might not mean much to the big wigs in washington but to many people it means they can buy milk
    and bread and maybe some lunchmeat for the kids and eat for another day come on and do the right thing
    you people should walk in these peoples shoes just for a month ill bet you couldnt do it ....we the people need
    to take back our goverment because you the "House Republicans" are supposed to be working for us the people
    i sure dont see that happening

    December 22, 2011 at 9:39 am | Report abuse |
  10. Kingfisher

    $1000 a year is a full tank of kerosene, or enough to heat for my house for a few months.

    December 22, 2011 at 9:39 am | Report abuse |
  11. Hank

    To Me this just proves that this Congress is out of touch with the middle class and they show their true colors by protecting the wealthyand turning their back on the rest of Us.

    December 22, 2011 at 9:40 am | Report abuse |
  12. Ann

    I'll still be able to get food, prescriptions, insurance, and all that on $40 less – but I will most likely have to lay off my housekeeper. I don't expect anyone to feel sorry for ME, but for HER.

    December 22, 2011 at 9:40 am | Report abuse |
  13. coy4one

    The loss of $40 means eating less, or not paying a bill. I've already gotten rid of all the extra perks in my life. I have free TV, and eat value meals because they are cheaper than grocery shopping. I've just found out that my 2012 insurance will no longer cover two of my medications, so I either drop them completely, or instead of taking every day, I take one every 3 days. My property taxes went up 10.7% this year, I need to sell my house since I cannot afford to pay $3,650. I no longer have a car, cause I could not afford that. My company gives, if you're lucky, a 3% increase in pay every two years, when the cost of living is 6.7% yearly. Now, I need to live on $40 per week less.......ugh!

    December 22, 2011 at 9:41 am | Report abuse |
    • Johnny

      If your mortgage is $3,650 and $40 a paycheck makes that much of a difference, you should never have bought your home in the first place – you obviously could never handle the responsibility.

      December 22, 2011 at 9:44 am | Report abuse |
    • Don

      I believe he meant his property taxes were $3650 (per year).

      December 22, 2011 at 9:45 am | Report abuse |
    • Ceridian

      If your takehome pay is going to decrease by $40, that means you make at least $50,000 a year. Sure seems manageable to me.

      December 22, 2011 at 9:45 am | Report abuse |
    • coy4one

      My property taxes are $3,650 per year. My mortgage is $650 per month. When I bought the house 13 years ago, my property taxes were $700 per year. This is the result of a Bush/Perry administration in Texas.

      December 22, 2011 at 9:46 am | Report abuse |
    • Don

      but really, if coy4one is going to live on $40/week less because of this, it means he is making $96,000 per year. I have no sympathy for people who make that money and still have issues.

      December 22, 2011 at 9:47 am | Report abuse |
    • coy4one

      Sorry Don. I wish I made $96,000 per year, but it is less than 1/2 of that. Don't know where you got that figure.

      December 22, 2011 at 9:50 am | Report abuse |
  14. Just print the truth!!!

    I wish the mainstream media would just tell the American people the facts and quit re-hashing this $40 amount.

    Your take-home pay will decrease $40, if you make at least $50,000 a year. If you make less then that, your take-home pay will decrease by less than $40. If you make more than $50,000, you take-home pay will decrease by more. For example, if you make $80,000 per year, your take-home pay will decrease by approx. $66.

    All of these people posting comments about how they just barely live day to day and crying about a $40 decrease in their pay, probably do not make enough money to see a $40 decrease. Why does our government portray this dooms-day scenerio and create so much stress? Just print the facts

    December 22, 2011 at 9:41 am | Report abuse |
    • coy4one

      You obviously can afford the $40...good for you!

      December 22, 2011 at 9:44 am | Report abuse |
  15. Dave

    Sometime we are going to have to wake up. Our country is broke,All these Gover,, program ,,, I love to tell this story about this lady that could not hear good ,she got from ssi 660 a month,, becase she could not hear good,,, Damn this is got to stop.

    December 22, 2011 at 9:43 am | 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