The problem with margin for long term borrowing (other than margin calls) is it's not fixed rate. It generally has no interest rate guarantees at all. If you st

The problem with margin for long term borrowing (other than margin calls) is it's not fixed rate. It generally has no interest rate guarantees at all. If you start doing buy-borrow-die at 2%, that could easily become 10% or more, and that's on your entire accumulated balance, and it compounds. Then either you suck it up and absorb the high interest, erasing some or all of your tax savings, or you are forced to sell to pay off the loan at potentially a bad time, at which point you pay the tax anyway and give up on stepped up basis entirely. The people doing buy-borrow-die are not just doing it on margin. They have special arrangements with a bank. Also, if you are able to beat interest rates with your investment, the government wins too. The tax liability grows at the same rate. Faster, actually, since the gain becomes a larger percentage of the total. You are not cheating the government out of anything. Quite the opposite.