-It requires an arbitrary use-agnostic choice of value. Why 10 million? Why not 5? Why not 50?

Why are tax brackets the value they are? Would you say that tax brackets are a bad system? They also rely on an arbitrary use-agnostic choice of value.

-it requires an arbitrary time scale. Why 5 years? Why not 3? why not 10? Why not limit once in a lifetime?

Same reason taxes are calculated over yearly income and not every 2 years or 6 months. It’s also arbitrary, it’s just an arbitrary you’re used to so you don’t question it.

Both cons you found for my solution are also present on tax brackets, i.e. arbitrarily defined values and length, by that logic you also think tax brackets are a bad idea.

The reason why I said 10 Mil over 5 years is to try to exclude as many legitimate use cases as possible. For starters we’re talking about people, not business, there are legitimate reasons for a business, particularly large ones, to take much larger loans. But for people? The largest expense on a regular person’s life will be the house they buy, and 10 Mil is WAY above the average price for that, if someone is buying a >10 Mil house I’m okay with them getting taxed on the loan, if they managed to get a 40 year 0% loan (impossible) they’ll already be paying 20k per month, might as well pay some more on top of it. But wait, you might say, what about smaller loans that compound to >10 Mil, that’s why there’s a 5 year limit, this means the person needs to loan over 2 Mil per year, which is simply not possible for someone unless they’re mega-rich, because again they would need to be paying >20k per month.

And yes, those are arbitrary values and probably they need adjusting via research and experimentation, but again the same is true for tax brackets, and I think everyone agrees those are a good idea.

This answer you acknowledged my proposal, therefore I now believe that you understood it, on your first answer you suggested I had a definition of income/non-income loans, which is not at all what I’m proposing.