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. Sterling S.

    $40 is 40 less dollars that I would have to put on my credit card to cover my expenses. It means that I'll ultimately owe less on my credit card. As a college student living on his own, it's already hard enough to cover rent and living expenses. I don't need the House Republicans adding to that challenge.

    December 22, 2011 at 3:33 pm | Report abuse |
    • Rex T.

      As a college student living on your own, you are doing well for yourself making $50,000 per year. Congrats!

      December 22, 2011 at 3:35 pm | Report abuse |
    • Normal in NH

      How dare you ask what $40 means to any private citizen?! Stop the wasteful spending then you can discuss a rational tax plan...again, how dare you?!

      December 22, 2011 at 3:48 pm | Report abuse |
  2. Boomer in Mo

    Well, I could put $75 a week into the Health Savings Account I'm being thrown into on Jan. 1, instead of $35. I predict I'll be in medical bankruptcy within the next 5 years because of the HSA and my new retirement plan involves suicide at age 85 (or maybe sooner.) I'll sure never be able to retire.

    December 22, 2011 at 3:36 pm | Report abuse |
  3. Doug - Evington Virginia

    I've read the comments, and would agree that 40 dollars a pay for many families is significant. The problem however, is where the $40 is coming from – the Social Security trust fund; which is already in deep dodo. It's interesting that our Reps and Senators are quite happy to take it from the SS fund (someone else's pocket), but are unwilling to take it from the Fed. operating budget (thier pockets).

    December 22, 2011 at 3:36 pm | Report abuse |
    • PollyP

      Very well said!

      December 22, 2011 at 4:00 pm | Report abuse |
  4. PM122211

    That $40.00 is equal $1040.00 a year and 1040 is the form you file for you individual income tax. is this a go incident or what. that $40.00 is a lot for the average family in the country. thats a two weeks worth of meats if you eats at home, its a dinner for 3 twice a month, i can go on and on the list will go on. we need that money to survive no question.

    December 22, 2011 at 3:37 pm | Report abuse |
  5. Bird

    $40 is my gasoline bill each week...Heck, ask Obama and his family to cut out the expensive trips they take to make up for some of the loss. I would say there are many, many families that haven't had a vacation in quite some time. they've got Camp David and the beaches on the eastern shore they can go to at a fraction of the cost.

    December 22, 2011 at 3:38 pm | Report abuse |
  6. Todd

    It's just $40 every two weeks. $80 a month in taxes, not very much to worry about. + It's just $40 a month increase in insurance premiums. Not enogh to complain about. + We're increasing your copay. It's only $40. You'll hardly notice. + Sorry, the company can't afford a cost of living increase in your salary this year. Surely you can find $40 in your budget. Everything cost more. +The city has to increase your utilities, it's only $40. Doesn't everyone has an extra $240 a month laying around?
    I miss the days of just nickel and diming. Until politicians learn to meet in the middle where the real world exists, instead of putting us in the third world $40 at a time, I'm not voting to re-elect anyone.

    December 22, 2011 at 3:38 pm | Report abuse |
  7. Mr. Mike

    $40 is a perfectly good shot of Johnny Walker Blue that feels so good in my belly.

    December 22, 2011 at 3:41 pm | Report abuse |
    • Peggs

      I thought JW Black was the good stuff ???

      December 22, 2011 at 3:49 pm | Report abuse |
    • Mr. Mike

      Well, it was Hitchens' favorite, but Black is about $30 a bottle compared with $225 for Blue. And the extra dollars are worth it.

      December 22, 2011 at 3:54 pm | Report abuse |
  8. jorge80

    Ron Paul 2012. To save the country. He has the best foreign policy and best economic policy.

    December 22, 2011 at 3:42 pm | Report abuse |
  9. Jill-IN

    $40 per paycheck is half of our month's groceries -frugal as that is. It's chump change to these money bags congressmen.

    December 22, 2011 at 3:42 pm | Report abuse |
  10. smitvict

    That's $40 less funding for social security. We are NOT talking about an evil tax increase here, but instead restoring funding to an already shaky social security system. There comes a time when you have to cut the cheap high and pay the bills.

    December 22, 2011 at 3:44 pm | Report abuse |
  11. Cindy M

    $40 means alot to me: My husband and I live from month to month on SSI- SNAP food assistance helps, though the price of food has shot up lately here in northern NY. $40 would buy us 4 or 5 days of groceries.

    December 22, 2011 at 3:45 pm | Report abuse |
    • Steve

      Yet you have internet access ........

      December 22, 2011 at 3:56 pm | Report abuse |
    • Lisa

      ummm, if you're on SSI, you're not paying taxes so there is nothing at stake for you. Now if you want to complain about no COLA increase, or the fact that MediCare premiums will increase that is different.

      It will still fall on deaf ears, though. Congress isn't affected like the majority of the country. They don't get it and they really don't care regardless of which party you favor.

      December 22, 2011 at 3:56 pm | Report abuse |
  12. MF Dan

    Even if this does kick in (which I doubt it will), look at it this way, say your raise for 2012 is $8,000. You have to pay an extra $2,000 to SS. Just "pretend" that your raise was only $6,000 and then go on smiling. I guess I am a glass half-full kind of guy. God bless.

    December 22, 2011 at 3:46 pm | Report abuse |
    • Normal in NH

      that is a terrifying approach no matter what they do spin a happy tale and skip on down the road. You're probably a happy, content man with low blood pressure...good for you! 🙂

      December 22, 2011 at 3:53 pm | Report abuse |
    • Kim M

      RAISE??? I do not know where you work – but I will not see a Raise for the next 5 years. That is the reality of MIDDLE America. not to mention – I would not get EIGHT THOUSAND ... or even six thousand in a raise. how comfy you must be.

      December 22, 2011 at 6:52 pm | Report abuse |
  13. skarphace

    Here I will expand on the argument in favor of this Payroll 'tax' cut in order to provide a counter argument.

    Why stop at $40 per biweekly paycheck (for someone making $50k a year)? Why not $119 per paycheck? Wouldn't that be even better? If so, then all we have to do is abolish Social Security alltogether. That would result in a 6.2% cut instead of a measly 2.1% cut.

    So we get our cash now, but we get no Social Security when we retire. Still like this Payroll 'tax' cut? If you do, then you should be all for it. If not, then you most definitely should not be.

    December 22, 2011 at 3:47 pm | Report abuse |
  14. fistface

    40$ ???! How about $4,000k less a year or more and shrink Government Spending??

    December 22, 2011 at 3:48 pm | Report abuse |
  15. Raquel

    That's gas money for two weeks!!!!

    December 22, 2011 at 3:58 pm | Report abuse |
    • skarphace

      Again, this cut was meant to be temporary and therefore should not have been factored into your required budget.

      December 22, 2011 at 3:59 pm | Report abuse |
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