A work in progress…

Here is how I parse this.

There are four not two groups of people in your scenario.

In our country, we are segregated by three main Power categories, the Ruling Class, the Ruled Class and the Under Class. If you further designate us by economic categories, you get The Working Rich, the Working Poor, the Dependent Rich and the Dependent Poor.

The spectrum of the working rich and working poor is where the notion of upper middle and lower classes belongs. This is the area at which your example most applies, except that Paris Hilton is part of the Dependent Rich, not the Working Rich.

How I define:

Upper Middle and Lower Class: Is the division one would expect, however, we should use those term only to span the Working Rich to the Working Poor

• Working Rich: are those who have worked, self-invested, sacrificed and spent less than they bought in. These people will typically have a strong network that they actively cultivate but partially inherited. Their Spending Power and Taxable income are the same.
• Working Poor: are those who have worked, but spent more than they brought in. (this can do to a tragedy too, like an uninsured fire, a lifetime illness, etc.) These people typically have a weakly inherited network and don’t have the means or wherewithal to grow it. The have little spending power and almost no taxable income.
• Dependent Rich: are inheritors by birth or marriage, they have large amounts of spending power; they create very little of it, if any. Their Network is strong and unlimited. While some of them work very hard, they depend on Government and the Media to protect their wealth and lifestyle, keeping them safe from the rest of us as, well as an economy that maintains or grows their empire. Using their extensive network they even protect themselves from the Government. This is key: The have more spending power than they have taxable income. Parish Hilton may spend $10M a year, but only be (income) taxed on a few hundred thousand, her actual salary.
• Dependent Poor: are also inheritors, but they have inherited poverty, both fiscally and in the network. They are truly dependent on Governments, Charities or self-created Sub-Cultures to survive. These are street people, illegals, mentally ill and in some cases those who have rejected the system intentionally (communes, cults, and the like)

These groups are segmented this way.

• The Ruling Class: These people have almost all the Power, and influence and access to information that few have.
• The Ruled Class: These people have almost no Power, outside of large group voting blocks. and access to limited or controlled information and are pitted against the Under class.
• The Under Class: These people have no Power or access to information and are told The Ruled Class stole their opportunity.

Kinds of wealth

• Capital: Any cash, assets or property
• Network: Simply, who you know, or better, who knows you. This is where access to partnerships, money, investment, clients, jobs, information, and government comes from.
• Information: Insider information of any kind.
• Intellectual: Anything that is “tradable” that rests in your innate skill or talents. Also Copyrightable, Patentable, and protected creations or ideas.
• Influence: Having an audience who’s decisions you can alter.

I would love to see a “wealth” tax that quantifies the total value of someone’s wealth and tax that number each year. (Income would be a very small part of that figure.)

Every country has something similar.

The differences are who fills those top and bottom spots. Whether it be dictators, warlords, the educated, royalty, bankers, scientist, military leaders, CEOs, celebrities, land barons, presidents, priests or artists all these parts will get filled. The form of government is mostly irrelevant, and it becomes a shell game as to which form of Government will fix the current state. The truth is none of them will “fix” it. It will be reorganized. Imagine being part of the cast of a new play on Broadway. It gets bad reviews, so the director instead of writing a new play or hiring new actors just moves the current cast around so that the each play a new part. Castro’s takeover of Cuba is a good example of this. I answer the question, “Does Cuba have a good or bad government?” different than I used to. Now I would simply reply that it depends on who you know or how one is networked in Cuba. It will be great for some and shitty for others as are ALL governments.

Articles like The Rich Getting Richer are a shell game.

These articles are correct but very misleading. They will paint a picture of the vast economic differences between the Dependent Rich and Dependent Poor, but then put it into a Working Rich vs. Working Poor context. The proof is that the solution is helping within the size of the income tax, which the Dependent Rich don’t pay, but the Working Rich pay out the nose. If the Dependent Rich can keep both of the Poor groups mad at the Working Rich then, they are protected both from revolt as well as the Government changing the rules on them. The sick part is that the Working Poor and middle class celebritize the very class of people that are sucking us dry and royally screwing us.