You can presumably adjust this for how much money you actually took out. If you got a line of credit on your house/stocks, but you didn't take out a cent, then you don't owe anything. If you took out 10% of your portfolio value in cash, and the LTV ratio was 50% (that is, you can borrow up to 50% of your portfolio's value), then you're deemed to have sold 20% of your portfolio and have to pay capital taxes. You're free to play around with the parameters when it comes to how the capital gains are calculated (eg. tax lot, which stock was "sold").
And then you pay back the loan (worth 10% of your portfolio.) So now you've been taxed for what exactly? Having access to a pile of cash for some temporary period that expired? It makes no sense to me. We don't tax you on the principal of a loan since it's not income, its debt.
