Can governments regulate how much profit margin companies can have?

Question

I keep seeing comments about how companies are having record profits, and consumers are paying for inflationary prices. Can governments regualte profit margins as a form of consumer protection?

In: 0

Answer 1

Not directly but tax policy can control how a company spends profit. Low taxes allow a company to pass high profits to the shareholders and higher corporate taxes encourage investment in payroll or research and development.