Why Not Tax Excess Reserves?

I always begin my day by checking out what other people are saying. I read Krugman, DeLong, Thoma, Mankiw, Calculated Risk, etc... Today I saw an interesting discussion, brought on by Keith Hennessey's analysis of Obama's budget proposal. It highlighted the obvious things, increased deficit, higher taxes, and bigger government. The only important thing he said in his piece was this:

"From a macroeconomic standpoint, short-run deficit reduction is contractionary. Reducing the budget deficit toward manageable levels is necessary from a federal fiscal standpoint, but it reduces short-term economic growth. This is the Administration’s core short-term economic policy challenge, the tradeoff between fiscal stimulus and deficit reduction over the next 2-3 years."

Now, in all honesty, I don't believe the increasing budget deficit poses any major short term problems. The world reserve currency is still the U.S. dollar, (though declining slightly in popularity,) and our government debt remains of the safest assets to hold in the world. But in any case, politics plays a significant role in policy. If republicans are truly populist, and are opposed to higher taxes on individuals, and if they are truly fiscally conservative and would like to see deficit reductions ahead of government stimulus. Then what about taxing excess bank reserves? There's literally $1 trillion+ out there, doing absolutely nothing. See the graph below:


It's a politically feasible source of revenue. Americans are furious with Wall Street and the banks, so why not tax the banks their "bailout money,?" I'm aware excess reserves do not necessarily coincide bailout money, but the average American certainly isn't, (yeah that was a little dig at the republican constituency.) It would narrow the deficit, and it might provide banks with an incentive to start lending.

There are a couple of logical reasons as to why banks aren't lending. Currently, banks are probably holding onto excess reserves as a hedge against the Fed unwinding its emergency lending facilities. They also recognize that at some point, inflation might pose a greater risk than it does today, and the money supply will have to contract. When that happens, the Fed will sell treasuries to reign in some of that excess and banks will have to pay up. Most importantly, there just aren't many opportunities out there. The money is in the system with no place to go. Households are busy saving/repairing their balance sheets and have no incentive to take on more debt. Luckily, I have a solution...

While the average American can't find any money to spend, and won't want to take on the risk associated with borrowing, there's someone who can. A tax on excess reserves would help put to use some of those stagnant excess funds. The federal government could use the revenue to help create more jobs etc... all the while narrowing the deficit. So when Hennessey talks about the "balance" between employment and deficit reduction, this proposal could in theory, present a solution.

I realize there are plenty of holes in this idea, but I'm an undergrad student. I know it might not be "fair," to tax all banks holding excess reserves, especially in the aftermath of the financial meltdown. I realize that many banks are only acting responsibly by holding reserves, and I talked about the incentive structure for that above. I realize that punishing them with a tax for acting responsibly isn't necessarily just. But lets be honest. Banks have had plenty of help from America in recent months. It might be time they return the favor.