That's no joke.
During my career, which could best be described as "zzzzzzzzzzzzz" (no combat, no special duties, etc.) I have fared pretty well. The only taxable pays during peacetime are your actual "pays" - basic pay, ACIP, etc. Allowances (food, uniforms, BAH) are tax-free. Also, you can contribute (as of 2005) up to 10% of your PRE-TAX basic pay (and 100% of other pays) to the TSP, which lowers your tax liability at the end of the year.
When you factor in all of the different financial benefits, PLUS the free medical/dental (and extremely discounted plans for dependents), PLUS commissary/exchange privileges (the package store pays for itself!), PLUS the "feel-good" gimmes that the civilian world gives to us (free theme park admission, discounts for many products/services, etc.) we actually do pretty well.
Also, while on active duty, the government paid me to get my undergraduate degree (after paying me to live in Hawaii for a few years). I used my SGLI (another benefit) and actually put away a bunch of money while at school. Then, when I graduated, they gave me a promotion and a hefty raise! Now they are paying me to learn how to fly. Finally, I will not even begin to list the intangibles of military life...the PEOPLE are what makes this life so rewarding.
(I am starting to sound like the forsakeourtroops.com guy's worst nightmare!)
Still, the military has been very, very good to me, and I really do feel honored that they have given me their "special trust and confidence." Sounds sappy, but when I think about it that way, it is easy to see why I give 100% with all that I do.
Of course, there are those 96-hour days when we more than earn our compensation...