“The Devil is in the details” has described matters for as long as we all have been alive. The various attributions of the phrase go back almost 200 years and are believed to have started with the statement that “the Good God” is in the details. This phrase remains particularly relevant in today’s complex society. Following are three examples where details really matter.
1) While recently reviewing the California budget compromise I found a small clause that no one was talking about. This clause states that the State Board of Equalization is going to register all businesses in California generating more than $100,000 in revenue, even if they are not retailers. I wrote an article for a California publication, but no one in the legislature picked up this point, much less questioned it. The Orange County Register saw my article and wrote an editorial on this new procedure. This did not stop the clause from being included in the final draft of the budget.
The State Board of Equalization will soon be sending notices to hundreds of thousands of businesses requiring them to register with the state for the supposed purpose of reporting sales tax of on-line and out-of-state purchases. This is just the first step toward spreading the sales tax to fee-based businesses like architects, lawyers and gardeners.
2) Congress passed a broad-based financial industry bill that was signed by President Clinton in 2000. That bill authorized some procedures that had been banned since the stock market crash of 1907. A small clause in an obscure bill called the Commodities Futures Modernization Act of 2000 outlawed the states from regulating existing gambling and bucket-shop laws against Wall Street. The bill also removed federal oversight of credit default swaps and derivatives. The bill was passed on the last day of the lame duck Congress in 2000. This minor piece of legislation that was barely reviewed by Congress was central to the market downfall of 2007-08 and the credit crisis of 2008.