Then the stocks used as collateral should be taxed as realized gains.
Why? They haven’t been realized. Literally nothing happens to collateral unless the loan is defaulted on. Do you think you should your house should be treated as realized gains (i.e. the same as if you sold it), if you take out a home equity loan?
we could make it so that it only applies to loans over some arbitrary amount…(within a certain time period to counter multiple smaller loans as loopholes)
This is literally impossible to realistically enforce, total waste of resources and effort to even try. Myriad ways to spread it out over different people/entities/etc.
Why? They haven’t been realized. Literally nothing happens to collateral unless the loan is defaulted on. Do you think you should your house should be treated as realized gains (i.e. the same as if you sold it), if you take out a home equity loan?
This is literally impossible to realistically enforce, total waste of resources and effort to even try. Myriad ways to spread it out over different people/entities/etc.