That's not a loophole, it is illegal. You can't deduct personal expenses from a business. I realize the rich do it, but if that is the problem let's go after that.
Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not.
>You can't deduct personal expenses from a business. I realize the rich do it, but if that is the problem let's go after that.
We have gone 'after it' again and again, making the system more and more complex. So much that you can now out-lawyer the IRS if you have enough money. There is no 'personal' expense, everything is somehow a business need. There is no simple solution to this really. Whatever you do to hurt ten billionaires, the ten million small business owners will face the brunt of it.
>Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not.
That is the point, you don't sell stocks that makes you a billionaire. Instead, you find more and more creative ways to leverage that stock for loans, for deals, for power/control, etc etc. Also see cross collaterals where the same asset is used for multiple purposes at the same time!
So if you argue that we already can't enforce existing tax laws then why is proposing new, extremely expensive and difficult to enforce tax laws the solution?
Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not.