The TBTF tax

Not the first time this has been aired, but written in an entertaining way.

"Yesterday, the news broke about a tax on the large banks — it was ostensibly designed to close the deficit. Instead, I’d like to rename it the Too Big Too Fail Tax (TBTFT).
. . .
It could potentially do more than reduce the deficit — if it goes far enough, it could actually solve the TBTF problem. Exempt small regional banks with under $25 billion in deposits. Make the tax progressive so it become increasingly larger as deposits become greater. $25-$50 billion in deposits is one fee (Let’s say 0.1%, that’s $25 million on $25 billion in assets). Have it scale to the point where its punitive — 1% on a trillion dollars in deposits.

The goal here isn’t to raise money — its to force the TBTF banks to become smaller — to break up the Citigroups and the Bank of Americas. This tax will restore competition to the banking industry."

In fact, Obama is kind of considering something along these lines, although less precisely so:

"The precise parameters of the proposed levy are still being determined, but it is expected to be risk-based and fall only on the top 20 to 30 banks."

Bank taxes: bring 'em on.
Update: more details are emerging.