What it is:
How it works/Example:
Many oil companies created income trusts could distribute their profits to shareholders on a pretax basis.
After that date, the Canadian government began taxing the trusts like corporations and applied tax rates that were sometimes more than 30%, dramatically reducing the amount of the distributions to investors.
Why it matters:
The Halloween Massacre was a big increase in tax revenue for the Canadian government, but it wildly devalued the and consequently decimated many investors' portfolios. According to one report, the Canadian energy sector lost $30 billion of value overnight.