Yes, I pay taxes. My salary doesn't come from THOSE taxes though (income taxes). It comes from different taxes - namely, property taxes.
So I guess you could say I shouldn't be billed property taxes. Ok - what about someone who works where I do but lives in a different jurisdiction (very common)? That jurisdiction isn't going to give up THEIR revenue because he works for a different one, and it wouldn't be fair to the other employee that they still have to pay property taxes while I don't because I live in the same jurisdiction where I work.
Or consider someone who is renting - they're not paying property taxes anyways - but his landlord certainly is, and you can bet it's folded into his monthly bill. Why should I get to own a house tax free whilst he's having to foot his landlord's taxes as part of the payment?
I know, I know. We could hire someone to figure out all these exceptions and such, and then straighten it all out. Make sure that Federal government employees don't pay Federal income taxes but still pay state, and state employees pay federal but not state. And local government employees pay both but no property tax *IF* they're living in the same jurisdiction they work in.
Congratulations - you just rehired those recently laid off IRS employees that you thought weren't needed under this new "simple" system.