For context, I answered this question on Quora
We already have an unrealized capital gains tax at the local level. It’s called property taxes. They’ve been a shit idea for centuries now because they not only encourage land speculation and suburban sprawl by taxing undeveloped parcels held out of use less than developed ones and single family houses at a lower rate than multifamily houses they are also a burden on cash poor property owners without exemptions. If your tax needs a bunch of loopholes for people with limited or fixed incomes like the homestead exemption, disabled vet exemption and taxes freezes then your tax is a garbage idea that should probably be scrapped. Property taxes are only viable because property values change very slowly making assessment for taxes purposes possible. Unlike real property, stock prices change a million times faster. Thus a one time assessment every year in April would never accurately assess how much a company and the shares people own in it are worth in any given financial year as forcing multimillionaires and billionaires to liquidate their equity in their companies would result in mass sell offs and price drops burdening middle class households invested in the stock market with unrealized losses they won’t be able to recover. I answered this question in 2021 and the idea has not become any less brain dead than it was then.
Market capitalization =/= wealth just as property value =/= rental value of land; both are estimates of anticipated wealth. In either case the wealth tax just falls on the income of the asset owner. Federal taxes do not fund spending. At the federal level government creates money through spending; that is how all fiat (by decree) money works regardless of whether a currency is paper bank notes or a digital ledger of debits and credits. Federal taxes destroy money. What this idiot is proposing is that we destroy wealth.
This brain dead idea would also encourage multi-millionaires and billionaires to shift their investment portfolios from liquid assets (i.e. shares of companies) to illiquid assets such as real estate where they can take on mortgage debt, insurance, and maintenance costs that will vastly reduce their tax liability. Real estate is always a desirable alternative because uncle Sam gives it a plethora of tax privileges not available to other asset classes which is why billionaires are buying up millions of acres of farm land and waterfront property even without the wealth tax. Unlike stock, there is no way to sell off fractions of it at specific prices divisible by the whole value of an estate because subdividing land actually increases its value and it falls under the tax jurisdiction of state and local government. Making land and housing a more profitable form of wealth than equity in their own company would in fact just encourage billionaires to engage in more real estate speculation just as local wealth taxes already do, which ultimately just makes the cost of living higher for low and middle income people.