Levels of equality

What is the optimum level of inequality? Few people that I have encountered support absolute material equality, but if they do not support this, is it not incumbent on them to hold an opinion on the optimum level of material distribution? Should there be an upper limit on the income of the highest earners as a multiple of the lowest earners? It is suggested that income disparity motivates people in a meritocratic society - is the meritocratic benefit proportional to income disparity? Or will the meritocratic benefit begin to level out for an increasing level of income disparity?