So why isn't the suggestion to tax the loan instead of the asset (that is 10x more volatile than say property)?

That may be a perfectly viable solution. Seems like an easier path to me, at least. But the point is that these assets are a lot more fungible than you imply.

> It is not a good measure of the money someone may be able to realise.

And as such, when you get into the higher ranges, net worth is quite a good indicator.