[thevagrant]

Wouldn't it make sense to stipulate that loans taken against stocks are taxed in some form?

Average workers holding stocks then would not get taxed until they sell their stock. Those borrowing against the value of stocks using the strategy you mention would be taxed at a specific rate while the loan exists.

Perhaps that's too difficult or affects average people as well. The other option as another poster points out is to remove tax deduction from specific assets or cap the deduction.