The other day, I posted on a paper by Doug Shackelford, Dan Shaviro, and Joel Slemrod that is a terrific framework for thinking about bank taxes. The authors looked at four ways to tax the banking business in the wake of the recent financial collapse—a transactions tax, a tax on bonuses paid to employees, and two levies on banks themselves.

The temptation to raise taxes on financial institutions is almost too great to resist. These institutions were largely responsible for the recent economic crisis. While the financial collapse cost millions of Americans their livelihoods, many top bank executives happily took their bonuses (in some cases paid with taxpayer money). And the arrogance and sense of entitlement that oozes from some is beyond offensive.