If one believes it’s a big problem, it seems to me there’s an easy solution that doesn’t disrupt anything else. If you use a stock as collateral like that, it’s

If one believes it’s a big problem, it seems to me there’s an easy solution that doesn’t disrupt anything else. If you use a stock as collateral like that, it’s a taxable event that steps the basis of the stock by the amount of the loan. No unnecessary taxation of assets at rest, no double taxation later because of the step up in basis, and you close the loophole if you view it as such.