There are other pre-existing tax structures that make a lot more sense. It'd be much simpler to simply tax the consumption of the kinds of goods that those loans buy. If you have a large tax on hyper-expensive yachts or whatever, that simply has to be paid when the sale is made, no matter how many layers of shell companies or whatever other trickery you try to bury the purchase in. Trying to tax the loan, beyond not really making much inherent sense since net worth hasn't actually changed, simply incentivizes a lot of loopholey nonsense that's hard to track.
For instance, if my direct loan is gonna be taxed to hell, then I'll just set up a shell company that takes out the loan instead. Sure, maybe there could be rules against it, but now the IRS has to spend a ton of time and money going down all these rabbit holes. Consumption taxes are essentially impossible to avoid, since you simply cannot buy your penthouse or yacht or diamonds or whatever without somebody paying the money.