> There are also practical problems with taxing wealth. [...] With a wealth tax, you might not have the money. For example, if you own an investment apartment or some other illiquid asset you can't just sell a piece of it every year to pay the tax.

This is a strawman trotted out against wealth taxes.

Stated another way: no, people shouldn't be able to put their wealth into an arbitrary form to make it untaxable.

After that, it's standard planning. Owe an unexpected amount of tax on a high performing asset you don't want to liquidate? Take a loan with it/gains as collateral. (The same as people do now!)

The bigger issue is valuation of illiquid assets. I.e. how to properly tax someone benefiting from opaque trusts or with shares of non-public assets (which they might be inclined to hide the profitability of).