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By Bill Wichert February 2, 2012

Republican senator claims Pennsylvania charges top income tax rate of 3 percent and Delaware has no state income tax

As Democrats and Republicans squared off Monday on Gov. Chris Christie’s proposal to reduce state income taxes, state Sen. Joe Pennacchio reminded his fellow legislators of how taxpayers in Pennsylvania and Delaware are already getting better deals.

Pennsylvania charges a top income tax rate of 3 percent, while Delaware doesn’t collect any state income taxes, according to Pennacchio.

"We’re competing worldwide, but especially we’re competing with our regional states. This has to make us more competitive, because when you take a look at us versus Pennsylvania, it's still three percent in Pennsylvania," Pennacchio (R-Morris) said during a Senate Budget and Appropriations Committee hearing. "When you take a look at us versus Delaware, it's still zero in Delaware."

In a news release issued following the meeting, Pennacchio repeated the claim: "A small decrease is a good first step to making New Jersey more competitive with states like Pennsylvania which charges a top rate of 3%, or Delaware which has no state income tax at all."

Each time, Pennacchio was right about Pennsylvania, but wrong about Delaware. As PolitiFact New Jersey found, both states charge state income taxes.

Pennacchio acknowledged in a phone interview that he was wrong about Delaware, but argued that New Jersey still needs to be competitive with its neighboring states.

"I think the premise is still the same," Pennacchio told us.

Here’s the story with state income taxes in Pennsylvania and Delaware:

Pennsylvania charges a flat income tax rate of 3.07 percent on all taxpayers, regardless of income level. Certain individuals or families may qualify for a state program that eliminates or reduces their state income taxes.

So, Pennacchio is correct about the 3 percent rate in the Keystone State.

But Delaware also charges a state income tax. In 2011, that state’s rates ranged from 2.2 percent on taxable income greater than $2,000 to a top rate of 6.95 percent on taxable income greater than $60,000. This year, Delaware’s top rate is decreasing to 6.75 percent.

(For shoppers looking to save some money, Delaware doesn’t have a sales tax.)

These seven states don’t collect any state income taxes: Alaska, Florida, South Dakota, Washington, Nevada, Texas and Wyoming. New Hampshire and Tennessee impose taxes on interest and dividends income, but not one’s wages.

It’s worth noting that the top income tax rates in Pennsylvania and Delaware still remain below the maximum rate in New Jersey, where individuals with taxable income exceeding $500,000 face a rate of 8.97 percent.

Our ruling

At a Senate committee hearing and then in a news release afterwards, Pennacchio claimed that Pennsylvania imposes an income tax rate of 3 percent and Delaware doesn’t collect any state income taxes.

The senator’s on target when it comes to Pennsylvania, where taxpayers face a flat rate of 3.07 percent. But he’s wrong about Delaware, since that state imposes income tax rates ranging from 2.2 percent to more than 6 percent.

We rate the statement Half True.

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Our Sources

Sen. Joe Pennacchio remarks at Senate Budget and Appropriations Committee hearing, Jan. 30, 2012

New Jersey Senate Republicans, Today at the Statehouse Political Theater: Much Ado About Nothing, Jan. 30, 2012

Tax Foundation, State Individual Income Tax Rates, 2000-2011, March 3, 2011

Internal Revenue Service, States Without a State Income Tax, accessed Jan. 31, 2012

Federation of Tax Administrators, State Individual Income Taxes, accessed Jan. 31, 2012

Interview with Elizabeth Brassell, Pennsylvania Department of Revenue, Jan. 31-Feb. 1, 2012

Email interview with Angela Moffett-Batty, Delaware Division of Revenue, Jan. 31, 2012

Interview with Sen. Joe Pennacchio, Jan. 31, 2012

New Jersey Department of the Treasury, 2011 New Jersey Tax Rate Schedules, accessed Jan. 31, 2012

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Republican senator claims Pennsylvania charges top income tax rate of 3 percent and Delaware has no state income tax

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