BROWSE

Halloween Massacre

Definition

"Halloween Massacre" is the term associated with the major reorganization of United States president Gerald Ford's cabinet on November 4, 1975, which was an attempt to address multiple high-level personality and policy clashes within the administration. The overhaul came at a time when the president's leadership abilities were being broadly questioned, and he was being heavily criticized by California governor Ronald Reagan and others from the conservative wing of the Republican Party The shake-up had its roots at the beginning of Ford's presidency in August 1974. As was the case when Lyndon Johnson and Harry S. Truman succeeded to the presidency intra-term, in 1963 and in 1945 respectively, under similarly strained sets of circumstances, Ford inherited President Richard Nixon's cabinet and staff of presidential advisers. Over the course of several months, Ford slowly replaced several Nixon holdovers with his own appointees.

What is 'Halloween Massacre'

Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, announced that all income trusts would be taxed in a similar manner as corporations at a rate over 30% on taxable income, causing unit holders' values to decrease dramatically virtually overnight.

Explaining 'Halloween Massacre'

Income trusts, which were permitted to make distributions to unit holders on a pretax basis under old Canadian income tax laws, were a popular investment vehicle in the early 2000s, especially in Canada. The Canadian energy sector was hardest hit by the change, and suffered an estimated loss of about $35 billion to investors, giving rise to the term "massacre".

This change in the Canadian tax law, which was largely debated after the fact, was made to remedy a perceived loss of tax revenue.


Further Reading


The state of the public corporation: Not so much an eclipse as an evolution
onlinelibrary.wiley.com [PDF]
… Evidence from Korea, Journal of Law, Economics and Organization 22 (2006), pp … and Alexei Ovtchinnikov, “Corporate Political Contributions and Stock Returns,” Journal of Finance 65 (2010), pp … 49 The “Halloween Massacre” is an example of a decisive action by a government …

Angola's façade democracyAngola's façade democracy
muse.jhu.edu [PDF]
… Evidence from Korea, Journal of Law, Economics and Organization 22 (2006), pp … and Alexei Ovtchinnikov, “Corporate Political Contributions and Stock Returns,” Journal of Finance 65 (2010), pp … 49 The “Halloween Massacre” is an example of a decisive action by a government …

Are financing constraints binding for investment? Evidence from a natural experimentAre financing constraints binding for investment? Evidence from a natural experiment
www.sciencedirect.com [PDF]
… Evidence from Korea, Journal of Law, Economics and Organization 22 (2006), pp … and Alexei Ovtchinnikov, “Corporate Political Contributions and Stock Returns,” Journal of Finance 65 (2010), pp … 49 The “Halloween Massacre” is an example of a decisive action by a government …

Three Essays on the Financial Capital MarketsThree Essays on the Financial Capital Markets
ir.lib.uwo.ca [PDF]
… Evidence from Korea, Journal of Law, Economics and Organization 22 (2006), pp … and Alexei Ovtchinnikov, “Corporate Political Contributions and Stock Returns,” Journal of Finance 65 (2010), pp … 49 The “Halloween Massacre” is an example of a decisive action by a government …

Are financing constraints binding for investment? Evidence from natural experimentAre financing constraints binding for investment? Evidence from natural experiment
eureka.sbs.ox.ac.uk [PDF]
… Evidence from Korea, Journal of Law, Economics and Organization 22 (2006), pp … and Alexei Ovtchinnikov, “Corporate Political Contributions and Stock Returns,” Journal of Finance 65 (2010), pp … 49 The “Halloween Massacre” is an example of a decisive action by a government …

The Columbine High School Massacre and criminal justice system response: an exploratory case studyThe Columbine High School Massacre and criminal justice system response: an exploratory case study
www.tandfonline.com [PDF]
… Evidence from Korea, Journal of Law, Economics and Organization 22 (2006), pp … and Alexei Ovtchinnikov, “Corporate Political Contributions and Stock Returns,” Journal of Finance 65 (2010), pp … 49 The “Halloween Massacre” is an example of a decisive action by a government …



Q&A About Halloween Massacre


What is the name of the tax?

The "Halloween Massacre".

How much money was lost by investors due to this change in Canadian tax law?

Approximately 35 billion dollars were lost by investors due to this change in Canadian tax law.

What caused investors' values to decrease dramatically virtually overnight?

The announcement by Flaherty caused unit holders' values to decrease dramatically virtually overnight.

What was Canada's decision to tax all income trusts domiciled in Canada?

In October 26, Canada's minister of finance, Jim Flaherty, announced that all income trusts would be taxed in a similar manner as corporations at a rate over 3 on taxable income.

Why was the energy sector hardest hit by the change and why did it suffer an estimated loss of about 35 billion dollars from investors giving rise to the term "massacre"?

The energy sector was hardest hit because it had been one of the most popular investment vehicles for many years prior and also because it suffered an estimated loss of about 35 billion dollars from investors giving rise to the term "massacre".

Who suffered a loss due to this change?

Investors suffered a loss.

Why do you think there was so much debate after this decision had been made ?

There was so much debate after this decision had been made because people felt that their rights were being taken away from them without any warning or reason given for such actions .

Is there anything else you would like us know about what happened during Halloween Massacre ?

Yes , I feel that if more research had been done before making such decisions then maybe things could have turned out differently .