An agent has preferences defined over a consumption good and leisure. His utility function is U = (c - )2 l, where c is the amount of consumption good he consumes and l is the amount of leisure time. The parameter > 0 is a minimum consumption requirement. The agent has an endowment of h units of time, which he divides between leisure (l) and work (n): l n = h. The agent receives an after-tax wage of q w (1- ), where w is the agent's real wage (wage measured in terms of the consumption good, and is a marginal income tax rate (e.g., = .15). The agent's consumption c is constrained by his earnings, c w (1- ) n = q n