A collectivity of agents must choose the size of their government. There is a unit mass of agents. Each agent's income yi is an i.i.d. draw from a rightskewed income distribution F. An agent's preferences are represented by a utility function u(ci , g) = ci + H(g), where g is aggregate government spending (the size of the government). We assume H > 0. There is a uniform tax rate , so each agent pays yi in taxes, consumes ci = (1 )yi , and government's spending is g = y