[nrr]

The larger problem in my mind is that a lot of asset purchases bestow a lot of tax deferment privileges because of how the tax code is presently written.

Consider someone who holds a lot of capital with unrealized gains but nonetheless needs cash flow. A common practice is to borrow against those unrealized gains, which itself doesn't count as income even though it nevertheless tends to result in a greater accession of wealth.

The play, hence, seems to be that we consider the borrowing against unrealized gains to be the taxable event, not a wholesale tax on all held assets.

[randerson]

One idea I read on Reddit is to only let people borrow against their cost basis, rather than the gains. If you want to borrow more, you're forced to sell your stock.

[atmavatar]

Alternatively, you could continue to allow them to borrow against the current price of the stock, but doing so causes gains to become realized for the sake of tax purposes.

If you want to be especially charitable, allow the stock owner to choose which of the two options to use when applying for the loan.

[alberth]

So you’d disallow someone from taking out a 2nd mortgage against their home, to help pay for medical bills?

It sounds like you’re suggesting banking / society to operate like a Pawn Shop.