Tax Reform Gave Us Over $100

The second pay day in February is here for employees of the municipality where I work full-time in economic development and the school district where my wife supervises the school's lunch hour.

My pay is the same week after week, changing only once per fiscal year and typically only in amounts nearly too small to notice, one or two percent.  My wife's hours vary from fifteen to a little over twenty over each two-week time span and her paycheck fluctuates more than mine does as she is paid hourly and schools have far more days off than most places of work. 

Thus, I gave it two pay periods to compare to before the tax reform was passed.  I can say without a doubt that my take-home pay has increased by $84 both times.  My wife's increased by $71 on February 2nd and $36 today (she did not work last Friday due to school being canceled by snow).

Years ago, I would have been more excited for the two of us to take home an "extra" $155 or $120 per paycheck and might have even mentally put it into its own category, thinking that it was paying our monthly Comcast bill (around $175) or covering our natural gas and electric bills, which run between $150 and $200 combined depending upon the season here in the Chicago area.

Now I just think of it as $155 less of our money going to the federal government, which we will probably pay in some other form, for instance paying higher local or state taxes to make up for whatever shortfalls they have.

Don't get me wrong; I would rather have an additional $155 in take-home pay than getting dinked an extra $155 or no increase at all.  It is just that with ten grand or more flying out of our account every month, it is hard for me to get excited about that amount.  If I made the $155 extra in eBook sales, I would be ecstatic.

I had been wondering about the amount of "extra" income that my wife and I would reap from the recently-passed tax cuts.  It was touted as a benefit to the middle class, which we fall squarely in the middle of in our area, so I was certainly hoping to pay less taxes.

My interest was further piqued earlier this month after the flap caused by Paul Ryan's touting of a woman's "extra" $1.50 in weekly take-home pay, which is so small it is amazing that she even noticed.

Without even being sarcastic about it, the secretary was genuinely pleased at taking home enough to cover her annual Costco membership.  If it was me, I might post the same thing, bashing the so-called tax reform that only resulted in a hard-working middle class Money Mensch like me only being able to purchase an extra gallon of gasoline per paycheck or perhaps one Dunkin' Donuts coffee.

My new young boss, who makes about thirty grand less than I do (but will be rising quickly) told me that he was investing the "extra" sixty bucks that hit his bank account last pay day.  Now, there's a smart Millennial and he does not even blog about it.  But he sure will have plenty of money to retire on decades from now.  He is only thirty-two years old, fifteen years younger than me.


Perhaps I should think of this new-found "extra" money as just that: extra.  But I really do not.

While I applaud the tax reform and would most certainly rather take home an extra $155 than pay an extra $155, I am really just thinking of it as having paid $155 too much prior to this.  As a long time Money Mensch and cynic, I figure that while Uncle Sam puts the extra $155 in my pocket, someone else like the State of Illinois, Cook County, Comcast or our local grocers and fuel stations will reach in and take it right out.

I am not considering it new found money or extra to invest, although I probably should.

I am investing more in my daughter's 529 account this month than the $400 that I automatically invest on the first of every month and am also Paying Myself two hundred bucks more than usual and also sending a little bit extra to our mortgage lender, but that is a post for later.

So if you were paid today too or if you are paid on the Fridays when I am not or perhaps even weekly, take a look at the pay stub.  If you are a W-2 employee like I am, I know that you already know the amount that your check has gone up.  Maybe it is just $1.50 per week extra like the Pennsylvania secretary or maybe you are on the other end of the spectrum, taking in an extra $1.50 per minute.

Just don't get too excited over it because there is one thing that the Money Mensch knows.  As soon as you start counting the "extra" dollars that hit your account, some other government or private company is devising a way to take it from you.  Most likely the one that "gave" it to you in the first place.

Would Paul Ryan Tweet about that?

Call me a cynic, but give it some time and you'll see.