Harrison Searles

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Harrison Searles

Harrison Searles is an alumnus of the Mercatus Center MA Fellowship at George Mason University. Harrison earned a BA in Economics and Philosophy from the University of Massachusetts Amherst. He has attended Acton Institute’s Acton University and FEE’s Advanced Austrian Economics seminar. Additionally, he was the founding member and Secretary of the UMass Libertarian Club, and a member of the Undergraduate Economics Club.

Working Papers

An Analysis of Global HFT Regulation: Motivations, Market Failures, and Alternative Outcomes

Holly A. Bell, Harrison Searles | Apr 24, 2014
Recent market events like the “flash crash” of 2010, algorithmic failures at Knight Capital, and the release of Michael Lewis’s book Flash Boys (2014)—with his claims that markets are “rigged”—have heightened scrutiny of high-frequency trading (HFT) and increased demands for more aggressive regulation. However, HFT has several empirically demonstrated benefits, and the current, largely qualitative arguments against it call for careful scrutiny of proposed regulations.

Policy Briefs

The Deduction of State and Local Taxes from Federal Income Taxes

Jeremy Horpedahl, Harrison Searles | Mar 06, 2014
Removing the federal tax deduction for state and local taxes would make taxes more equitable throughout the nation, as both high-tax and low-tax states are treated equally by the federal government. It may also provide an efficiency boost for states and localities, as they abandon some services that could be better provided by private companies. The removal of this deduction would also allow federal marginal tax rates to be cut across the board, providing a secondary boost to the economy while still remaining revenue-neutral at the federal level.

The Tax Exclusion for Retirement and Pension Plans

Jeremy Horpedahl, Harrison Searles | Sep 17, 2013
The US federal tax code contains a number of provisions designed to encourage individuals to save for retirement. These provisions allow individuals to avoid or defer taxes if they choose to set aside a portion of their income for future consumption. When all of these provisions are combined, they are the second largest “tax expenditure” category as defined by the Joint Committee on Taxation. The exclusion of retirement savings from taxation causes some economic distortions, which we will discuss in this paper. However, unlike some other tax expenditures, there is a strong economic rationale for not taxing savings. Higher rates of investment lead to higher rates of economic growth, and it may be sound policy for the tax code to encourage this behavior, even after considering the economic costs. Excluding retirement income from taxation may also make the tax system more efficient, even though most other tax expenditures reduce efficiency.

The Tax Exemption of Employer-Provided Health Insurance

Jeremy Horpedahl, Harrison Searles | Sep 10, 2013
The exclusion of employer-provided health insurance from taxation lowers federal tax revenue significantly. According to the Office of Management and Budget, the federal government missed out on over $170 billion in income tax revenue and another $108 billion in payroll tax revenue in fiscal year 2012 due to the exclusion.1 Over the next five fiscal years, the federal government would collect around $1 trillion in income tax revenue if employer-provided health benefits were taxed, plus another $600 billion payroll tax revenue. Given the large deficits that the federal government continues to accumulate, this exclusion is a tempting source of new revenue. But closing this loophole would also mean a significant tax increase on all working Americans that currently receive health insurance from their employer.

The Home Mortgage Interest Deduction

Jeremy Horpedahl, Harrison Searles | Jan 08, 2013
The home mortgage interest deduction is the largest explicit tax deduction for households in the federal income tax code. Politicians have been reluctant to even consider removing this deduction, believing it to be one that provides significant benefits to middle-class taxpayers and encourages homeownership. These benefits are greatly over- stated: most taxpayers do not benefit from this deduction at all or receive a very small benefit. The only taxpayers who do receive a large benefit are those in the upper income brackets. Taxpayers and the entire economy would be better served by removing the mortgage interest deduction and lowering marginal tax rates to offset the change.

Research Areas

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