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Should. They should be taxed extremely heavily to try and stop that loop hole and abuse of power.
What about loans against assets like houses? I wouldn't consider simple house owners necessarily rich and they should be able to get a mortgage without penalty.
You know, you can just do things. Like, laws don't need to be applied unilaterally. You can, at the same time, tax a 100,000,000 dollar loan, and not tax a 1,000,000 dollar loan.
Kind of like how generally, low income people do not pay much or any income taxes, or how certain products are subject to additional sales taxes.
Exclude a mortgage for your primary residence, capped at the median house price or something... And only exclude it IF it is paid back in full over a max period.
This is the case in the Netherlands.. paid back in full after max 30 years... No cap in how much. This was because the interest on the mortgage are tax deductible. So some bankers figured.. we keep the loan maxed, and put your paybacks in a special fund.. and at the end of the 30 years the fund pays back the mortgage. That way we get max interests and you get max tax break. In the end the banks made a lot of public funds private this way.