That’s roughly the same point I made in my original post. The only point different is that I wouldn’t call them loopholes. I call them tax exemptions written into the law to encourage whatever it was that the politicians wanted to encourage at the time they wrote the law.
The idea is to encourage the country to produce wealth which like the tides, raises all boats, and then tax income, which raises governmental revenue. Taxing wealth makes everyone poorer.
OK—but I think your point is theoretical.
In the real world (especially in this modern era) the “rules” are easily avoided (yes legally) by the very wealthy.
That is why theoretical discussions quickly become irrelevant.
“Taxing the rich” is like herding cats.
It is not just bad policy, it is silly-like taxing Unicorns.