Right, most people don't want to work in finance. They do so because of the money. And generally financial CEOs/CFOs are smart enough to only pay workers what they have to. So the incentives are probably priced appropriately.
"Innovation" always takes a ton of muck work that has very little glory. I work at a chip company. For every engineer doing cutting edge work, you have 10 people doing very unsexy support tasks that are 100% necessary. These are roles people do because they pay well, not because they are interesting.
As for reducing the incentives, that is already done quite heavily: the US income tax about 1/3. With that you should be able to create a very effective safety line, it is not the successfuls fault it is pissed away on political corruption and a wasteful war on drugs/minorities.
My motivation for doing what I do (which I'd classify as innovative) is not (just) the money. The money is nice too, but I don't think I could work in e.g. finance because I like technology and developing new stuff.