We were outraged over the Merrill Lynch bonuses; now we're outraged over the AIG bonuses and no doubt there have been many other outrageous bonus payments made by companies on the taxpayer dole.  Yet we're told that there is nothing to be done; deals have been made and can't be abrogated legally.  It seems to me that there is one easy way to go after the bonuses:  we make a short-term modification to the tax code.

Consider something along these lines:  for a period of 3 years (starting with 2008 - we should be able to do this retroactively), we make bonus payments from institutions receiving TARP or other federal rescue funds taxable at a rate of, say, 110%.  Congress should be able to pass this quickly (would anyone in Congress stand on the "no new taxes" principle here?)