Stand up for facts and support PolitiFact.
Now is your chance to go on the record as supporting trusted, factual information by joining PolitiFact’s Truth Squad. Contributions or gifts to PolitiFact, which is part of the 501(c)(3) nonprofit Poynter Institute, are tax deductible.
I would like to contribute
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.
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.
To comment on this ruling, go to NJ.com.
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
Read About Our Process
In a world of wild talk and fake news, help us stand up for the facts.