U.S. Treasuries and McCulloch v. Maryland

[psholtz]

Derivatives traders generally believe that U.S. Treasury securities represent an artifically low measure of risk-free rate of return, and generally use other measures like LIBOR (London InterBank Offer Rate) to obtain such information.

They cite reasons such as the following:

* Treasury securities must be purchased by financial institutions to fufill a variety of regulatory requirements, thus creating "artificial" demand (driving prices up and yields down).
* The amount of capital required to hold Treasury securities is substantially lower than the capital required to hold similar investments in other instruments that have very low risk;
* In the U.S., Treasury instruments are given favorable tax treatment wrt other fixed-income investments b/c they are not taxed at the state level.

My question is, on this third point, the one about getting favorable tax treatment: is that a consequence of the SCOTUS McCulloch v. Maryland decision, where it was decided that States could not tax the federal government?