It’s the bonus season once again on Wall Street and by all reports, the boys in the suites are poised to party like never before.

The big banks and investment houses set record profits in 2009 thanks in large part to the truckloads of virtually free money handed out by the Federal Reserve, and some of the top producers are anticipating bonuses of tens of millions of dollars.

Never mind that most of these big shots would be on the unemployment line today if it weren’t for a taxpayer-funded bailout. If anyone thought their comeuppance a little over a year ago did anything to stem their attitude of entitlement, the upcoming bonus season should be a dramatic corrective. The Wall Street gang may have left our economy in ruins, but why should that stand in the way of a paycheck fit for royalty?

It’s an attitude that has Americans steaming mad, and rightly so.

That anger is being expressed from across the political spectrum and the politicians in Washington, particularly President Obama, should be paying attention. The president campaigned as an agent of change, but quickly installed an economic team— headed by Treasury Secretary Timothy Geithner and economic policy advisor Larry Summers— that clearly caters to Wall Street over Main Street. While their economic policies have sparked a major stock market rally, they have done little to improve a job market as bad as anything we’ve seen since the 1930s. They may be popping champagne corks on Wall Street today, but for most Americans there’s little cause for celebration.

President Obama’s call this week for a fee on big banks to help recover some of the bailout funds is a small step forward, with the emphasis on small. It is expected to collect about $90 billion over the next decade— in other words, it barely scratches the surface of the financial toll these reckless Wall Street players have taken on this country.

We believe bolder steps are needed to right this wrong, and to stem the legitimate anger in the country over the abuses of the big banks.

Regulating executive pay clearly is not the answer. Fortunately, we don’t have to look very far to find a better one. All we need to do is take a trip down memory lane. For decades, this country had a very effective means of keeping executive pay in check, while simultaneously encouraging longer-term thinking in business management. It was our income tax system, which for much of the 20th Century set top marginal tax rates at between 70 and 90 percent. If we really want to stamp out Wall Street excess, tax those bonus checks the way they used to be taxed.

Some would undoubtedly scream “socialism” at the very notion, but then they’d have to call Dwight D. Eisenhower and Richard Nixon socialists. Under Eisenhower’s administration, the tax rate on income over $400,000 was 91 percent. At the same time, America’s economy boomed and we enjoyed balanced federal budgets. It was also an era when top executives earned maybe 10-12 times the pay of a company’s lowest level worker. Of course, top executives had little reason for focus their energies on huge personal paydays in an era of high marginal rates.

That changed dramatically in the 1980s, when Ronald Reagan’s tax policies slashed the top marginal rate from 70 percent, to just 28 percent by the time he left office. That change helped spark the huge run-up in executive pay and Wall Street excess, and left too many corporate managers focused on short term profits, over long term sustainability.

Those AIG traders who destroyed their company and nearly ruined the global financial system in the process, did not care that their credit default swaps threatened to crush their firm. They only cared about the amazing profits, and paychecks, made possible by their Ponzi-like scheme. Why worry about the company imploding two years down the road, if you walk away with tens of millions of dollars, even after taxes?

America can no longer afford such reckless tax policies, which provide huge rewards for top earners, higher taxes for middle income Americans, and have encouraged reckless behavior by too many financial firms. We have paid the price and Americans are justifiably demanding a solution. But government officials need not be in the business of regulating executive compensation. Set appropriate tax rates and common sense will do the job for them.