CasualObserver says: But I heard the government made money on the bailouts and some were actually very good investments. 

That's just a lie and a terrible way to look at it. The government did not make money on the bailouts. While some of the bailed out companies repaid the preferred equity portion of their bailouts and dividends:

1. Many other companies did not pay back the government money and some, like Fannie and Freddie, probably never will. 
2. Those measurements of "good investment" do not include all of the other funds that the bailed out companies received like asset guarantees, FDIC money, proceeds from being a counter party to other bailed out companies, and super secret interest free federal reserve loans. 

For instance, just looking at the Citigroup's return of $57 billion on the $45 billion from the Capital Purchase Program and Targeted Investment Program may look decent (left), but add six months of secret federal reserve money to the cash flows, and we see the return go to less than 1%. Not very impressive reward for placing $2.5 trillion at risk in the midst of a financial meltdown. I don't think we have any idea about the magnitude of losses on the asset guarantees actually are.

Liberty1787 says: This is statist! Give more power to the government, to the unconstitutional IRS, no less?

Unfortunately, yes. But I think that's what could make it possible. It appeals to the big government instincts of both parties. It gives Democrats the ability to raise taxes on rich bankers, but because it only targets bailout recipients, it castrates the Republican argument about raising taxes on "productive" job creators. It wouldn't attempt to control how much companies pay their employees and it also wouldn't require new government departments and czars. It should appeal to the two major populist movements - Tea Party and Occupy Wall St. I think it would be great if we had a free market, but we are far from that. This is an attempt to reimpose the "loss" portion of the profit and loss system that capitalism is supposed to be.
 

EMHisBunk says: The crisis proved that people are irrational and deregulation is catastrophic. Greenspan, of all people, admitted that. We need regulations to prevent people from making bad decisions.

OK fine, work on that. But implement the Mark of Bail in the interim. If you get your regulations passed, and you are correct, there will never be another bailout, and the Mark of Bail will never be exercised. At least we will have something in place for the next 10 years while you work on passing that magical legislation that eliminates greed and avoids regulatory capture. Considering that our government wasn't able to pass any meaningful financial regulation that did anything about too big to fail immediately after the crisis, I will not be looking for it anytime soon.
 

AEIbot says: The crisis was caused by the GSEs and the CRA. We need to get rid of those and let the market work!

OK fine, work on that. But implement the Mark of Bail in the interim.  If you get what you want, and you are correct, there will never be another bailout, and the Mark of Bail will never be exercised. At least we will have something in place for the next 10 years while you work it.  If you really love the free market, LET THINGS FAIL, if they come back to you, without socializing the losses, it was meant to be. 
 

DarkDuck says: Our problems are more fundamental. We should abolish the limited liability corporation and make all companies partnerships where their managers have skin in the game. We should remove the tax deduction on interest which encourages companies to become large. We should make the practice and teaching of phony risk measurement techniques like value-at-risk and modern portfolio theory a capital offense. We should also sentence all business school professors, management consultants and econometricians to hard labor GULAGs.

Bravo, sir! I couldn't agree more. But let's implement the Mark of Bail in the interim while we work on that. At least it makes the managers, and all employees, have skin in the game after the fact, by clawing back some of their filthy lucre after the bailout.
 

Pragmaticus says: I like the idea, but it does not give our legislators enough flexibility. I like making the people at Citi pay a Bailout Tax, but it shouldn't be as high for Wells Fargo. And maybe we should make apply to the managers at the auto companies, but it shouldn't apply to the workers, even if they are making $140k per year. Also, shouldn't there be additional adjustments to the Bailout Penalty for...

Stop right there! The only way this can work is if it is simple. One formula that applies to everyone. The legislation must be no more than 4 pages long, preferably written on parchment with a quill and inkwell. And why is that?

Our legislators, with few exceptions like Ron Paul, are essentially bought and paid for. If it is appropriate to call the bailout recipients Publicans, as I do, then these are certainly the prostitutes. The above is a modified figure from a Mother Jones article (HT: Barry Ritholtz) that identifies each senator or representative by the industry of their top corporate sponsors. It is not surprising that the industries that received the bailouts are spending the most on tricks.

First of all, we do not want to create new cabinets, new departments, and new bailout czars to determine who should and should not pay the bailout tax, and how much they should pay. It must be simple and formulaic. Most importantly, we certainly do not want to give our legislators the "flexibility" to create additional rules and exceptions that empower lawyers and lobbyists to find loopholes and cut back room deals that relieve certain Publicans from their duty to pay the Bailout Tax.

By the way... with the exception of Ron Paul, our presidential candidates aren't much better.