Report: Nevada's wealthiest stand to lose $1.8 billion

Nevada’s wealthiest households stand to lose as much as $1.8 billion annually because of recent changes in federal tax policy, according to the latest High Net Worth Report released by The Private Bank by Nevada State Bank.

Changes in the tax code analyzed in the survey include those sourced to higher marginal and capital gains tax rates, modifications to the alternative minimum tax, new Medicare taxes and a permanent modification to the estate and gift tax.

“The bank’s wealthy clients are clearly concerned about the impacts of the recent federal tax increases,” said Russell Price, executive vice president of The Private Bank.

Price said the “x-factor” in determining the impact of these changes is how wealthy individuals and families will alter their investment strategies in response to the changing tax laws.

Raising the highest marginal income tax rate from 35 percent to 39.6 percent is expected to cost Nevada high net worth households $1.2 billion, according to the survey prepared for the bank by Applied Analysis.

Medicare taxes will add an estimated 0.9 percent to the marginal income tax rate, with an impact of approximately $91.1 million annually. The report also found increasing the capital gains rate from 15 percent to 20 percent is expected to result in an additional $668 million from Nevada’s high-income households.

“We are already seeing the impact of the federal tax increase,” said Jeremy Aguero, principal analyst with Applied Analysis in Las Vegas. “During the first 45 days of 2013, lower levels of spending are being reported by local retailers as well as some hotel casinos as workers at all levels feel the pinch of reduced take-home pay.”

Aguero said federal tax policy changes “clearly targeted higher net-worth households.”

The revisions to the tax code are not all bad, as the estate and lifetime gift tax code has been permanently rewritten and indexed to inflation. Now, estates and gifts up to $5 million will be exempted, and any amount above that will be subject to a 40 percent tax.

Contact reporter Chris Sieroty at or 702-477-3893. Follow @sierotyfeatures on Twitter.