At least it closes the loop hole where you borrow against your stock and never pay taxes on it because you never sold it.
If your stock holdings are growing faster than inflation and the interest rate at which you are borrowing, it’s an easy way to monetize unrealized gains without a taxable event. If you have a huge stock portfolio, brokers will lend you money against your stock at very low rates, a few bps above what Treasuries yield. If you have $4B of stock they might let you borrow $1B for what would be ~4-4.5% using that stock as collateral. You can theoretically take out a margin loan for up to 100% of the stock held in an account, but that’s risky due to margin calls.
The idea is to let the cost basis step up to the price of the asset at your death which will eliminate the capital gains that would’ve been owed. Then your heirs sell a portion of the stock to pay off the loan and keep the rest.
People bring up a loophole that does exist, and assume that everyone uses it. Welp, like most of these "1%" discourse, its pretty damn rare.
https://taxprofblog.aals.org/2026/06/16/fox-and-liscow-the-r...
> If buy-borrow-die were the dominant playbook, the rich would be leveraging aggressively against their ballooning portfolios. They aren’t. Borrowing against unrealized gains is, if anything, more of a middle-class habit than a billionaire one.
Also, not all states apply property taxes the same. In my state, my house is assessed often by the government and then my taxes rise based on the value of my house.
Property tax is a tax on specific property (usually we are talking about real property, but I've paid e.g. property tax on a car). It is usually irrespective of wealth.
Someone who buys a house with cash and their neighbor who is underwater on their mortgage and at risk of insolvency will pay the same tax.
Note also that you rarely see property taxes on e.g. valuable jewelry because unlike real property and cars, both of which have ownership centrally registered, jewelry is not centrally registered.