Because the police have weapons, tiny Keltham!  What if the police for a sub-city decide one day that, in this sub-city, it's fine to raise kids of Keltham's age, and force them to work in exchange for only enough food to keep them alive?  What if the police decide that nobody in the city block is allowed to hire different police, and take all their stuff to make sure they can't afford them?  What if somebody dies and their head doesn't get cooled and preserved fast enough?  That's the kind of thing that Civilization as a whole has to prevent, as a universal regulation with no opt-outs, so it doesn't happen anywhere in Civilization.  Even if you thought people should be able to opt-out of any and every protection as adults, you'd still have to check to make sure they weren't having kids.

In fact, tiny Keltham, your subcity does contract with a police agency to do a lot of ordinary policing, and it does appear in your parents' rent on the 'foundation' for their 'house-module'; but Governance has to provide oversight of that policing, and that costs money.  Cryosuspension emergency response on constant standby service costs money.  Protecting the Waiting Ones in their frozen sleep costs money.  Maintaining the election system to pick people to run the Government that regulates armed police costs money.  Quiet Cities to host the 5% of people who can't be happy working in Civilization, and who are thus held injured by what Civilization has chosen to become, cost actually quite a lot of money.  No, most people won't need the Quiet option; but everyone, when they're born, can be considered as needing an insurance policy against that happening to them, and that insurance policy costs money.

Subsidized policy-prediction_markets to make all those institutions work boundedly-optimally cost money.

When you add up everything like that, which Governance has to do for everyone or can't just sell to individuals separately, it actually does eat all the rent of unimproved land plus all of Governance's other revenue streams.  Lots of individual philanthropists fund Governance on top of that, so that Civilization can have a bigger Government than basic rents alone will support - so that there can be Annual Alien Invasion Rehearsal Festivals, say, or so that Quiet Cities can have nicer things.

(Most philanthropies in Civilization with room for more funding accomplish roughly the same amount of marginal good per marginal labor-hour, according to most people's utility functions.  If you've got a fairly conventional philanthropic utility function, you get to pick whichever random charity or impact-certificate market best matches your personal taste there, including just throwing your money at Governance.  It's like buying your individual-stock equity investments; there's more volatility, but all the expected returns are the same.)

Because the police have weapons, tiny Keltham!  What if the police for a sub-city decide one day that, in this sub-city, it's fine to raise kids of Keltham's age, and force them to work in exchange for only enough food to keep them alive?  What if the police decide that nobody in the city block is allowed to hire different police, and take all their stuff to make sure they can't afford them?  What if somebody dies and their head doesn't get cooled and preserved fast enough?  That's the kind of thing that Civilization as a whole has to prevent, as a universal regulation with no opt-outs, so it doesn't happen anywhere in Civilization.  Even if you thought people should be able to opt-out of any and every protection as adults, you'd still have to check to make sure they weren't having kids.

In fact, tiny Keltham, your subcity does contract with a police agency to do a lot of ordinary policing, and it does appear in your parents' rent on the 'foundation' for their 'house-module'; but Governance has to provide oversight of that policing, and that costs money.  Cryosuspension emergency response on constant standby service costs money.  Protecting the Waiting Ones in their frozen sleep costs money.  Maintaining the election system to pick people to run the Government that regulates armed police costs money.  Quiet Cities to host the 5% of people who can't be happy working in Civilization, and who are thus held injured by what Civilization has chosen to become, cost actually quite a lot of money.  No, most people won't need the Quiet option; but everyone, when they're born, can be considered as needing an insurance policy against that happening to them, and that insurance policy costs money.

Subsidized policy-prediction_markets to make all those institutions work boundedly-optimally cost money.

When you add up everything like that, which Governance has to do for everyone or can't just sell to individuals separately, it actually does eat all the rent of unimproved land plus all of Governance's other revenue streams.  Lots of individual philanthropists fund Governance on top of that, so that Civilization can have a bigger Government than basic rents alone will support - so that there can be Annual Alien Invasion Rehearsal Festivals, say, or so that Quiet Cities can have nicer things.

(Most philanthropies in Civilization with room for more funding accomplish roughly the same amount of marginal good per marginal labor-hour, according to most people's utility functions.  If you've got a fairly conventional philanthropic utility function, you get to pick whichever random charity or impact-certificate market best matches your personal taste there, including just throwing your money at Governance.  It's like buying individual-stock equity investments; there's more volatility, but all the expected returns are the same.)

Because the police have weapons, tiny Keltham!  What if the police for a sub-city decide one day that, in this sub-city, it's fine to raise kids of Keltham's age, and force them to work in exchange for only enough food to keep them alive?  What if the police decide that nobody in the city block is allowed to hire different police, and take all their stuff to make sure they can't afford them?  What if somebody dies and their head doesn't get cooled and preserved fast enough?  That's the kind of thing that Civilization as a whole has to prevent, as a universal regulation with no opt-outs, so it doesn't happen anywhere in Civilization.  Even if you thought people should be able to opt-out of any and every protection as adults, you'd still have to check to make sure they weren't having kids.

In fact, tiny Keltham, your subcity does contract with a police agency to do a lot of ordinary policing, and it does appear in your parents' rent on the 'foundation' for their 'house-module'; but Governance has to provide oversight of that policing, and that costs money.  Cryosuspension emergency response on constant standby service costs money.  Protecting the Waiting Ones in their frozen sleep costs money.  Maintaining the election system to pick people to run the Government that regulates armed police costs money.  Quiet Cities to host the 5% of people who can't be happy working in Civilization, and who are thus held injured by what Civilization has chosen to become, cost actually quite a lot of money.  No, most people won't need the Quiet option; but everyone, when they're born, can be considered as needing an insurance policy against that happening to them, and that insurance policy costs money.

Subsidized policy-prediction_markets to make all those institutions work boundedly-optimally cost money.

When you add up everything like that, which Governance has to do for everyone or can't just sell to individuals separately, it actually does eat all the rent of unimproved land plus all of Governance's other revenue streams.  Lots of individual philanthropists fund Governance on top of that, so that Civilization can have a bigger Government than basic rents alone will support - so that there can be Annual Alien Invasion Rehearsal Festivals, say, or so that Quiet Cities can have nicer things.

(Most philanthropies in Civilization with room for more funding accomplish roughly the same amount of marginal good per marginal labor-hour, according to most people's utility functions.  If you've got a fairly conventional philanthropic utility function, you get to pick whichever random charity or impact-certificate market best matches your personal taste there, including just throwing your money at Governance.  It's like buying individual-stock equity investments; there's more volatility, but all the expected returns are the same.)  (In Civilization, that is.)