"I argue that society as a whole would be better off if the financial sector were smaller, and received much smaller returns. A political strategy based on cutting the financial sector down to size has more promise for the Left than any alternative approach now on offer, and is a necessary precondition for a broader attempt to make the distribution of wealth and power more equal."
One of the interesting suggestions is the elimination of favorable tax treatment of capital gains. Currently, income received as a capital gain is taxed at a lower rate than regular income, and one of the tenets of right-wing taxation is the elimination of capital gains taxes. Even quasi-lefties like Matt Yglesias support the same thing.
This treatment, though, creates a tremendous economic incentive to make money through capital gains rather than regular salaries. Doesn't this extra incentive create many of the problems associated with a robust financial class. I mean, does this money really go to spurring innovation and jobs or just to line the pockets of the financiers?
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