Answer
1.5 inches.
Work Step by Step
We call the length cut off x. Recall, since it is cut off of both sides and both ends, a total of 2x is cut off of each side and end. Thus:
$40 = (8-2x)(11-2x) \\ 40 = 4x^2 -38x +88 \\ 0 = 4x^2 -38x +48 \\ 2(x-8)(2x-3)$
Since if 8 inches were cut off, there would be no width (and thus no paper) left, we obtain that x=1.5 inches.