"But what I'm getting at is when the government pays employees way above the per capita income of taxpayers."
I see your point, but I think is moot both in practical and ethical grounds because tax-to-wages is not a one-to-one map.
In practical, it's just a market, offer and demand: if you want the best (not that you *must* want them, maybe your needs are not up to the best and brigthest but *if* you need them), you need to have three things:
1) Have a selection process to filter out everybody but the best.
2) Have a process in place to detect the mistakes on point 1 above and/or those that, still being the best when hired, may be not the best now.
3) Offer the highest pay (not necessarily just money, other perks included) so the best apply to your selection process to start with.
And with regards to ethics, I don't see how someone can be comfortable paying, say, a bartender the same than to a, say, brilliant doctorate in something you really feel useful. It is not as if that any single doctor needs to be payed in full by any single bartender's taxes. It is still reasonable for an hypothetical town of "humble farmers" to pay their, say, doctor, or judge, or sheriff, above their own average income if they feel their value to the community is also above their own average.