Conveniently an article just dropped studying the effects of a new wealth tax in Norway. As usual with these sorts of taxes there were a lot of threats that all the high net worth individuals would emigrate to Switzerland or wherever. In reality, it turned out that threat was mostly hot air and bluster. (And of course, you can combine a wealth tax with some kind of exit tax for those that want to take their ball and go play somewhere else.)
But yes, you're certainly right that taxing unrealized gains is difficult for many types of wealth. But e.g. property taxes are often already based on some estimation of the market value of said property anyway, so no change there. And similarly publicly traded stocks and such have a clear market value. For other types of wealth, sure there are difficulties, but usually it's possible to do it in some way, be it by estimating the worth somehow or then delaying the tax until the thing is sold or the owner dies etc.
https://www.nber.org/system/files/working_papers/w35854/w358...
But yes, you're certainly right that taxing unrealized gains is difficult for many types of wealth. But e.g. property taxes are often already based on some estimation of the market value of said property anyway, so no change there. And similarly publicly traded stocks and such have a clear market value. For other types of wealth, sure there are difficulties, but usually it's possible to do it in some way, be it by estimating the worth somehow or then delaying the tax until the thing is sold or the owner dies etc.