Inflation

One of the people who I mutually follow on twitter mentioned something interesting yesterday.  Let the rich serve in the military and the military do the rich's jobs.  Of course, as I told him, I would be happy to do it for one day just to get the pay associated with it, this would only give my about Half a mil that I wouldn't normally get.  Then it got me thinking.
What is inflation?  The raise in the cost of living, right?  How does inflation occur?  By goods becoming more expensive.  How do goods become more expensive?  Because people demand more wages, right??
But wait, most people demand higher wages for things like being at a company for any length of time, or because goods are becoming more expensive.  So, if things didn't become more expensive, raises would only occur for seniority and promotions, meaning that if anything, the rate of inflation shouldn't exceed maybe .1% or remain flat. 
When that employee makes more, you would expect he would be able to buy more, yet with inflation he winds up buying less with more money...
So why then does inflation occur?
Here is a thought.  Inflation occurs becaause the rich want to have more money so they can stand on a pedestal and act as though they are doing something.  Inflation doesn't affect them because their income is so far beyond the scope of honest measure that if they want it, they buy it. 
So they use the guise of employees getting paid more to raise the prices, which raises inflation but still keeps them earning way too much comparitively.  We should limit what a CEO can make to five percent over what the vice makes, then repeat that down the line, until the last man standing is making five percent less than the man above him.  Yes, perhaps this is nearly extreme, but so is our inflation based on corporate greed. 
Is there any reason a CEO should be making 300 Million a year?  I could see the chief making perhaps a couple mil a year (after bonuses) and perhaps making money off stocks, but not off the hard working men and women of the United States.