How Do Government Regulations Affect Business?

Profit is the most direct answer to how government regulations affect business. In a free market society, such as the United States, the goal of business is to turn a profit. Every regulation that is imposed by the government on business ultimately affects its bottom line.

Regulations imposed on businesses by the government can be divided into four major categories: taxes, employee relations, international trade and bureaucratic. All businesses are subject to taxes based on the amount of money they earn. The amount of those taxes are primarily determined by the number of employees a business employs as well as how many of those employees are full time or part time. Employers must also follow government regulations regarding the hiring and treatment of employees. Many, but not all, employee-related regulations are either directly or indirectly related to those rights granted under the U.S. Constitution and its amendments. The government also imposes certain taxes, or tariffs, on international trade. It also enforces strict guidelines about the products and raw materials that may be traded internationally and with whom they may be traded. In order to keep consumers safe, the government has also formed certain organizations to that are charged with keeping business practices in line with codes regarding health and the safe consumption of materials and goods.