Essays on taxation and inequality

This article-based dissertation uses administrative data to examine questions about inequality, taxation, and election administration that are important topics of study in public economics and political science. The thesis is composed of three original papers that explore different questions, explained below. Chapters 1 and 5 supplement this work by providing a brief introduction and conclusion respectively.
In Chapter 2, I develop a new methodology to estimate income inequality for developing countries. The leading existing estimation technique explained in Alvaredo, Atkinson, Piketty, Saez and Zucman (2016) is ill-suited to conduct top income adjustment in low tax compliance countries. The new estimation technique addresses this limitation by matching corresponding income quantiles in survey and tax data to conduct top income adjustment. I implement both these methodologies using a combination of administrative data of all tax returns filed in Pakistan from 2008 to 2016, and nationally representative surveys. The results firstly show the existing technique breaks down in Pakistan’s low tax compliance context while the method proposed by this paper produces more robust estimates. It secondly shows that income inequality in Pakistan remained high and stable from 2008 to 2016.
In Chapter 3, I analyze the effectiveness of a tax broadening tool used in a low tax compliance, developing country context. The Board of Revenue in Pakistan regularly gave out extensions to the tax filing deadline under the assumption that time is a binding constraint to filing behavior. I conduct the analysis by using administrative data of all tax returns filed in Pakistan from 2007 to 2017 and combine this with data extracted from official government circulars containing details about deadline extensions. The results firstly show that deadline extensions are associated with individuals and unincorporated businesses delaying the filing of their tax returns by 88% and 70% of the extension duration respectively. Secondly, extensions reduce compliance of individuals and unincorporated businesses with the final extended deadline by 4.5 and 1.1 percentage points respectively. Finally, extensions do not encourage tax filing behavior and hence are ineffective in expanding the tax base.
Chapter 4 explores the impact of gender-specific polling stations on turnout. Several countries, including Pakistan, have created separate polling stations for males and females with the aim of increasing female voter turnout. The paper uses an administrative dataset of the polling station-level results from Pakistan’s recent general election in 2018 to estimate the impact of separate gender polling stations on voter turnout. The results show that separate gender polling stations reduce voter turnout for females by 2 percentage points on average, and for males by 1 percentage point on average.
Together, these three articles use administrative data to contribute towards the existing literature in public economics and political science. Chapter 2 contributes towards the literature on income inequality, Chapter 3 towards tax enforcement, and Chapter 4 towards political participation. The thesis also shows how administrative data can be used to answer large policy-relevant questions.

Keywords: Tax Broadening
Inequality
Public Economics
Political Participation
Taxation
Gender Gap
Advisor: Williams, M
Labonne, J