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. DSBsky

    Before you post do yourself a favor. Reach around behind you and take a firm grip of the back of your hair. Then proceed to pull your head out of your ass.. Thank you.. Learn the facts then talk. It's not 40 a month, it's 40 a check. And maybe it doesn't mean much to you. But when you've been living on stale donuts, goodwill handouts, hot dogs and mac and cheese for 2 years you get the right to say something. If you don't have it bad.. stfu and gtfo. your input here is not required, warranted, or desired.. Your not being hurt.. so F#@! off.

    December 21, 2011 at 3:12 pm | Report abuse |
    • GeneK

      The solution to your issue is not to extend a temporary cut that just steals money from your future SS benefits. The changes made to the tax codes since 2001 need to be undone.

      December 21, 2011 at 3:23 pm | Report abuse |
  2. Petronia

    For me, the $40 means a heck of a lot. There is nothing in my house to cut back on. I dont have landline, internet, or TV for that matter. This means, I am left with $20 a month for food. It is called survival for me. Many thanks to CONGRESS. Wish them all the best this christmas and new year.

    December 21, 2011 at 3:12 pm | Report abuse |
    • bill

      Petronia. What did you do last year before this tax cut went into effect? This $40 a month was essentially a gift that you knew ahead of time had an expiration date. So what did you do last year to pay for your bills?

      December 21, 2011 at 3:20 pm | Report abuse |
    • Ron

      No internet? gee, you're reading CNN online and posting – so you have to have an email.....

      December 21, 2011 at 3:23 pm | Report abuse |
  3. GeneK

    $40 a month isn't a significant amount for us. Certainly not compared to the negative effects the past 11 years of tax cutting have had on us.

    Let our "middle class tax cut" die. Then kill all the OTHER tax cuts that have been made since the last time the federal budget was balanced in 2000. Apply some of the revenue gain to extend unemployment for my neighbors, then apply the rest to the deficit.

    December 21, 2011 at 3:13 pm | Report abuse |
    • GeneK

      Oops, sorry, that should have been $40 a week.

      December 21, 2011 at 3:15 pm | Report abuse |
  4. Colleen

    That makes a DENT in the gas it takes my husband who got a job out of state to be able to come home and see our two kids.

    December 21, 2011 at 3:13 pm | Report abuse |
  5. mel

    I have learned to feed my family of 3 on $40 for a week. $40 is also $10 less than a tank of gas to get my children and I back and forth to work and school. When you are on a tight budget, $40 is a small fortune!

    December 21, 2011 at 3:13 pm | Report abuse |
  6. Paulie

    $40 buys me a nice glass of Johnny Walker Blue while I wait for my table at Morton's.

    December 21, 2011 at 3:14 pm | Report abuse |
    • Jeff

      Ha! That's cold dude...

      December 21, 2011 at 5:55 pm | Report abuse |
  7. angryblkman

    how come nobody mentioned that $40 less might mean less cigarettes or less beer? or less illegal drugs? Or less video gaming?

    How come when we talk money we go straight to food and medicine? get honest people!!! people waste money everyday on stupid things!

    December 21, 2011 at 3:16 pm | Report abuse |
  8. hawkechik

    A year ago we were living well within our means, our one credit card paid off and were finally looking at being able to put some money back. At that point that $40 would have been pocket change. But guess what? Due to our friends in Congress and our Mr. President we've had the equivalent of a 30% reduction in salary. Makes things a little tough. At least we have a job though.

    December 21, 2011 at 3:16 pm | Report abuse |
  9. bill

    pay the extra tax....i work for halliburton...i need the money

    December 21, 2011 at 3:17 pm | Report abuse |
  10. nicholas

    Guys, this is Social Security tax, so it is only on that first $110k of your income. After that your paycheck goes "up" by 6.2%. So it will be OK once you make it through the first $110k, regardless of whether they leave the rate. You will get your $40 back and then some.

    December 21, 2011 at 3:18 pm | Report abuse |
  11. Tim

    I just love these comments from people that proclaim, "$40.00 won't affect me at all' or "That's small potatoes." But wouldn't you think it would be even smaller potatoes if a person making $1 million a year paid a commensurate amount of increased tax? Yet these people are being protected by those zany folks on the right.
    In addition, we should not forget that that is money that will not be put into the economy.

    December 21, 2011 at 3:18 pm | Report abuse |
    • Jippetto

      The issue here Tim is that there are far few people making $1m+ per year than those making anything. To generate enough revenue for this off people making $1m+ alone you would have to tax them each $117,900. That doesn't seem very nice.

      December 21, 2011 at 3:22 pm | Report abuse |
  12. Becky B

    Honestly wish it was a bigger tax cut b/c my salary is not keeping up with the cost of living. Real estate taxes went up over 10% so my mortgage payment has increased, train fare increased over 30% starting in February, food is just ridiculous....I am getting closer to retirement, but feel like I will never be able to retire at this rate....we are becoming a country of 2 classes – the haves and the have nots....the middle class is diminishing.....

    December 21, 2011 at 3:19 pm | Report abuse |
  13. DL05

    Why is no one talking about Republicans want this $40 a paycheck to last all year and not for 2 month like Obama??? I am sure Obama just wants to come back in Feb 28th and blame the Republicans again for why things are not improving...

    December 21, 2011 at 3:20 pm | Report abuse |
    • GeneK

      The House republicans never wanted you to have it at all and they still don't. That's why they keep sticking in things that have nothing to do with taxes that they know will make their bill unpassable.

      December 21, 2011 at 3:27 pm | Report abuse |
    • DL05

      more amazing than your thinking is that Dems want the bush tax cuts to expire raising everyone's taxes roughly 5% but this "payroll tax holiday" is vital because 2% will cripple the recovery. Payroll being social security and holiday meaning temp, as it, 1 year...

      The circular logic of the Dems is laughable

      A rising tide lift all ships – grow the economy, the poor, the middle class, the rich and even the government will have more money and a better way of life... but the Dems would rather attack the rich and redistribute and blame.

      December 21, 2011 at 3:35 pm | Report abuse |
    • DL05

      and they onnly want to add that the extension last a 1 soo.... keep sticking what in?

      December 21, 2011 at 3:36 pm | Report abuse |
    • Jeff

      They added riders requiring drug testing to collect unemployment, lowering unemployment from 99 weeks to 59 weeks and they want to add means testing to Medicare. But you don't hear anything about that do you? You only hear that they want a year and Obama only wants 2 months, which is simply not true.

      This group of "small government" BS'ers want to add more government to people's lives by making them drive to a government office and pee in a cup in order to receive their pittance for survival. Pathetic.

      December 21, 2011 at 6:00 pm | Report abuse |
  14. humtake

    Maybe one day we will go back to being a country where people will say "What does $40 a person mean to America" instead of it always being about each individual person.

    December 21, 2011 at 3:21 pm | Report abuse |
  15. Aaron K. Clark

    If $40 a paycheck makes or breaks you, you need to learn to live within your means.

    December 21, 2011 at 3:21 pm | Report abuse |
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