Other possible forms of the Too Big to Fail fee

Some people say that excess leverage caused our financial crisis.  Others suggest that the Federal Reserve’s monetary policy was too loose.  Other people argue that reckless compensation policies at investment banks put an emphasis on short-term gains over long-term stability.  No matter one’s preferred narrative, it’s clear that commercial and investment banks played a central role in endangering our economy, and they will continue to do so unless corrective action is taken. In other words, there are a lot of disagreements about the particulars, but there is broad agreement – yes, even Republicans admit that financial reform is necessary – that the financial industry needs to change.

President Obama’s Financial Crisis Responsbility Fee is one initial step along the path to resuscitating our economy, but it’s important that we don’t let the banks off with such a lite slap on the wrist.  The financial sector obviously has a net negative effect (it’s rent-seeking) in the form it has taken over the previous 30 years, so it needs to become a lot smaller than it currently is.  To that end, Mike Derham over at Progressive Fix lists several different taxes that should be considered in addition to the FCRF.  The whole post is worth a read, though here are the taxes he mentions: bonus tax, transaction tax, excess profits tax, a tax on assets, and an excess leverage tax.  Any other ideas?