I'd think it would depend on the circumstances under which one asked, but also on the person's reason for asking.
For example, if you're on a first date (or with someone you may see as "potential dating material"), that kind of question can just be part of a sincere effort to get to to know the other person better (or else to come up with stuff to have a conversation about).
On the other hand, if people happen to be at the same party and just happen to be talking, I kind of think it's better to let the person share what he wants to share. That approach may eliminate some "fuel for conversation", but under those circumstances I think there are other things to think up as "fuel for conversation".
Circumstances, motive and maybe a "need to know" basis seem to me to be good guidelines.
Not particularly, but it is rude to ask anyone for details of their earnings.
If you don't know the person from a ham sandwich, then yes. But if you have an intimate relationship then no.
I would probably phrase it a little differently, like "What kind of work do you do?" thus it's not so much about income, but about how they spend their time. Most people are happy to talk about their work.
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