I'm no super genius, but it does sound like simply changing the tax code to require paying back all loans before changing the cost basis would be both easily and less possibly catastrophic than all of a sudden taxing unrealized gains.

The heirs get the stock at etc step-up basis after estate taxes, which are considerable in the $100m+ realm...

Heirs in the United States don't pay capital gains tax, but doesn't the estate of the super rich guy have to pay up to 40% in estate taxes on all his assests (with an exemption on the first ~$5M)?

Jeff Bezos is worth $200B. If he died, his estate would have to pay 40% estate tax on $195B in assets (first ~$5M being exempt), which is $78B in tax. That's still a hell of a lot tax. I know there were some loopholes used by the Walton family and other super rich, but isn't the above how it's supposed to work?