Tax The Big Bank Bonuses

America should take a page from the Brits and tax the enormous, unseemly bonuses that many bankers are and will soon be receiving. Since the U.S. taxpayer bailed out nearly every major bank in the country last year, at a time when they faced collapse, it only seems right that they should help rebuild an economy that is still very much in peril.

According to the New York Times this is what the British government plans to do.

The chancellor of the Exchequer, Alistair Darling, announced a one-time tax on bank bonuses Wednesday, part of the government’s effort to shore up the still-weak British economy.
Banks will be charged a 50 percent tax on 2009 bonuses of more than £25,000, or $40,800. It will be imposed on the pool of bonuses paid by a bank, rather than individual payments, and it will be paid by the bank — not by the recipient of the bonus. It will take effect immediately and will affect banks’ 2009 profits.
The levy represents the most direct attack on bank bonuses anywhere in the world. All banks in Britain – including the London-based subsidiaries of foreign banks — will be affected, whether they took government funds or not.

If the U.S. Treasury and President Obama had the courage to enact similar legislation, the U.S. could make greater monetary contributions to our crumbling infrastructure creating shovel ready jobs that could get Americans back to work. It could also reduce the monstrous debt levels that we are accumulating that are making the country beholden to the Chinese who own a major chunk of our debt which also costs us billions in debt service.

My bet, the big money guys on "The Street" have too much clout and they will send the lobbyists on "K Street" on a mad dash to the White House and Capitol Hill to kill off even the thought of taxing bonuses. Beyond that, Treasury Secretary Tim Geithner and White House Economic Advisor Larry Summers are too closely allied to "The Street" to put up much of a fight.

And by the way, this is not just some far left idea coming from the Labor Party in Britain. In 1981, Conservative Prime Minister Margaret Thatcher imposed a tax on bankers, who were raking in huge profits as a result of sky high interest rates.

But we Americans have ceded the Republic to the bankers and their Wall Street cronies and the people in the lower castes are just supposed to suffer when the system goes awry.