In our next edition of our nascent What If? series, we take a look at a target of the fiscal hounds. Since the dawn of time, sales tax was only collected on internet sales if the vendor had a physical presence in the state of the buyer. As many state governments ponder how they will get their budget back into the black, after plummeting home values and real estate tax revenues, collecting sales tax on online purchases seems to be a popular idea.

What would happen if sales tax were collected on online sales?

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Welcome to the first edition of our What If? series, where we wonder aloud and ponder some of financial life’s great mysteries. This first edition will take a look at the mortgage interest deduction, one of our most popular tax deductions, because it was featured by the deficit reduction commission just last week.

First we’ll take a brief look at the deduction itself and then discuss what if it didn’t exist, followed by what if it went away? I think the two are vastly different questions and I hope you’ll chime in with what you think.

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Many many years ago, when I was a young kid and a collector of comics, there was a series called “What If?” that I loved reading. I never bought many of them but the premise was that a Watcher could see alternate universes and, for our entertainment, showed us these alternate universes. It was a fun time. I think it would be fun if we played a few “What If?” games.

When I started another similar “fun” series, the Devil’s Advocate series, I didn’t know how popular it would be with you guys and I’m hoping the What If? series is the same. The topic we’re going to tackle is one that the President’s Budget Deficit Commission set their sights on – the mortgage interest deduction. What if the mortgage interest deduction didn’t exist?

If there are any topics you think we should cover, please let me know!

(Photo: franmoff)