“The top 1 percent [...] would pay taxes on increases in investment value annually, instead of waiting until assets are sold.”
Taxing all stockholders of a company on the fiction that they all could have sold all their shares at the maximum possible price, without crashing the price, is naively out of touch with how markets actually work.
Investments, especially stock, have no precise value until they are sold. It’s unfair to preemptively tax a capital gain before the capital gain has occurred. Otherwise the IRS will assess your unsold Beanie Baby net worth to have increased by $14k and tax you on 20% of it come the end of the year when in fact it turns out your collection has no resale value at all on an open market.
This is just as silly as market cap — the idea that just because someone paid $X to buy 0.1% of a company that’s currently in high demand and short supply it does not follow that, should every stock holder suddenly decide to panic sell 100% of the company, they would collectively get $X,000 in return.