This essay aims to correct and clarify two popularized yet distorted social topics among the media and political circle: worsening social inequality and the disappearance of middle classes. This essay, using objective income distribution data over the past three decades, points out that the income inequality problem has been widening since 1980 and it has lasted for 27 years. It certainly did not come about as a social problem after 2000 when the regime changed. The issue should have been more seriously analyzed and more effectively dealt with in the past, and it should not be used as a political tool for party struggle now. This essay further debunks the fabricated discourse that Taiwan is entering into the so-called ”M society” which stipulates that the middle classes have been collapsing and disappearing, leaving the polarized contradiction between the very rich and the very poor. Instead, Taiwan's middle classes have been steadily growing, though much more slowly than before and not without experiencing collective anxiety due to the negative impacts of globalization, financial crisis, the closure and removal of many industries in the past few years. In conclusion, this essay suggests a few policy directions for the government in dealing with Taiwan's income inequality problem and the middle class dilemma.