Final answer:
The acceptable level of inequality is complex, taking into account the ladder of opportunity, potential for increased inequality without affecting poverty rates, and the role of redistribution. It underlines the difference between income inequality and poverty and stresses the importance of opportunity for all.
Step-by-step explanation:
The question you've asked revolves around the concept of economic inequality and whether there is an acceptable level that does not lead to undesirable levels of poverty. This notion of a ladder of opportunity suggests that the background and quality of opportunities available to children, such as education and family support, play a significant role in their future economic status. Furthermore, it highlights that economic inequality arises not only from differences in effort or talent but also from the varied circumstances in which children grow up.
It is essential to understand that while income inequality can rise, it does not necessarily affect poverty rates directly. For instance, if those who are already wealthy increase their wealth, this increases inequality but does not change the number of people living below the poverty line. This shows that income inequality and poverty are related but distinct concepts.
Therefore, in discussing an acceptable level of inequality, it is imperative to consider the effects on poverty and to evaluate the means of redistribution, such as federal income tax and government antipoverty programs. The ultimate goal of redistribution policies is often not just to reduce inequality but to ensure that everyone has the opportunity to climb the ladder of success, irrespective of their starting point in life.