Lefty stuff, wall of insanity and a Doom Joke
(media.kotakuinaction2.win)
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What they mean is a scenario like:
Their angle is that loan collateral is "using" the increased value of the stock, so it should a taxable event same as selling it would. It would realize the gain. For it to not be completely retarded, I'd assume that would also reset the cost basis to avoid the double tax when you do dispose the stock.
Yeah, it's stupid. They're also ignoring the part where the loan needs to be paid back and that new money is being taxed when it becomes usable.
The only people who have skin in the game on this one are politicians who want to spend the tax revenue now instead of it be stretched out over repayment..