Quote:
Originally Posted by dewilson58
If all you take is the introductory class Basic Business & Economics 101, you are left uneducated. 201 & 301 expands on the basic economic "rules". The competition to The Villages does not prevent them from passing costs onto the customers.
No one in Sumter is paying $20k. TV could easily pass on an additional $2k and sell every house they can build.
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First, I don't know that it is relevant since what we are talking about is common sense, not advanced economic theory, but you raised the issue about my studying beyond Economics 101. In fact, I majored in Economics and was elected to Omicron Delta Epsilon (national economics honorary). Although it has been years since I studied the subject, I haven't forgotten everything, and the realities have not changed.
Perhaps you could explain your assertion about businesses being able to pass all cost increases on to their customers. If you were right, a business would never go bankrupt; it would just raise its prices until it made money. Just for fun, let's dig a little deeper:
Consider this: Why do you think the Developer had his County Commissioners offload his infrastructure costs on to the taxpayers???? Think about it.
To get technical: As you say, if the Developer upped his price by the amount of an increased impact fee, the Developer could eventually sell every house he builds. Product differentiation would permit that. But, because of competition, the sales would take place over a longer period of time and his profits would, therefore, take a serious hit.
Look at it this way, if the Developer could increase his prices in the amount of an increased impact fee without reducing his profits, he should immediately fire his chief financial officer for not having increased prices already, i.e., before the increase in impact fees. It would have been poor business to leave all that money on the table. But nobody has ever accused the Developer of being a bad businessman.
But let's assume you are right and the Developer could successfully pass on 100% of an arm's-length impact fee to the buyers of new homes. I would be fine with that because then you, I, and the other present Sumter County taxpayers would not be paying the Developer's infrastructure costs for him. They would fall on to the house buyers responsible for them.