I’m not sure that is true. More wealth is only useful if you can do something with it. If I buy my home for 300k and buy taxes on 300k, then that’s the level my income is calibrated for. If the value of my home rises to 900k with a similar increase in taxes, my tax burden increased by 3, but I still have the same amount of money and no way to get it out other than selling the house.

If you need thst money back at some point it makes much more sense to tax the sale or purchase of the property because nobody living there is affected until that sale actually happens.