As far as federal employees go, making their salaries tax-free would cost the government lost tax revenue. It would also make a lot of voters angry because they

As far as federal employees go, making their salaries tax-free would cost the government lost tax revenue. It would also make a lot of voters angry because they still pay taxes, but "those bureaucrats in Washington DC exempted themselves from taxes." I can see the speeches now. Approximately 50% of American politicians are anti-government as an ideology, and use the argument of "cutting overpaid government salaries" as a plank in their economic policy, so having well-paid gov't staff is just "waste" in their minds. As far as teachers go, they are not employed by the federal government. In most states they are county-level employees and the counties obviously do not have authority to dictate federal income tax levels.