The lack of reality is mostly from how much net wealth is a guessestimate. The actual realizable wealth is largely unknowable. There isn't enough price information to give a certain answer.

But sure, how do you propose to pay taxes with assets that can't be liquidated and may not even be possible to valuate?

Even if you somehow pay taxes in assets that can't be liquidated, now the government has the same problem instead. What is the government gonna do, pay its employees in unlisted stocks, yachts and famous paintings? How will it even know how much taxes it's gathered?

If the tax isn't isn't just satisfying some sense of petty envy, and the tax is intended to cover some budget deficit, I don't see how this would help.