The taxpayer - that's someone who works for the federal government but doesn't have to take the civil service examination.

Reagan’s quip turns a familiar political complaint—government bureaucracy—into a punchline by redefining “taxpayer” as an unexamined federal employee. The joke hinges on the civil service exam as a symbol of merit-based hiring and competence; by implying that taxpayers “work for” the government without such screening, he frames public spending as a kind of involuntary labor performed by citizens. The line fits Reagan’s broader rhetorical strategy of casting government as inefficient and overly expansive, while positioning the citizen as the productive party whose earnings are commandeered to sustain the state.