Earlier quoted context omitted.
Poverty on the other hand is a much, much harder problem than that. In fact, no one quite knows how to solve it in a general way (there are things that seem to work in certain contexts but not in others, many special case half-solutions). Everyone keeps saying that, as if there were only two alternatives: 1) completely fix poverty in a general way or 2) keep the status quo (and allow it to get worse). There has to be…
Have a read of what pg has to say about wealth inequality here: http://www.paulgraham.com/inequality.html "So let's be clear what reducing economic inequality means. It is identical with taking money from the rich."
You can let people become wealthy, and therefore give people incentive to invest and create, without creating the kind of insane inequality we currently have in the US.
His rant gets ridiculous, though, when he starts talking about doing away with the link between money and power... "We don't need to prevent people from being rich if we can prevent wealth from translating into power." That might be the dumbest thing I've ever seen a smart person say. Money is power. pg probably has someone mow his lawn. I can't do that. Why? Because pg is rich and can pay someone to do it, I am not, therefore I can't.
But that's not Power with a capital "P", you say. But it is. That's what power is, the ability to get others to do what you want them to do. If you have money, in a capitalist society, you have power, by definition. Whether you abuse that power, or use it for things that people consider to be bad (like buying off members of Congress) is a totally different story.
What implications does this have? Well, one of them is that money is, to many, a worthless thing to have if you strip away the power that comes along with it. Severing the connection between money and power would demotivate people the same way taxes do because, ultimately, they are the same thing: you used to have X, now you have X-Z.