That's not in dispute*, and the point is people can experience paper gains without being exceptionally wealthy, or even ramen profitable.
* To be fair, the notion of "tax" being just supposed public good versus requiring transactional value ("no taxation without representation") was a founding issue for the U.S.
These days, instead of citing nebulous public good, perhaps it could be thought of as NOA and SOA fees: Nation Owners' Association fees, and State Owners' Association fees. You can look for a different neighborhood, or contribute to improve this one.
> the notion of "tax" being just supposed public good versus requiring transactional value ("no taxation without representation") was a founding issue for the U.S.
This was a representational issue, not non-transactional taxation. Property taxes existed in many colonies 100 years before the revolution.
Not usually mentioned: even for this illiquid group there would still be an additional deferred tax of up to 10% on the unrealized capital gains upon exit.
* Once passed, anything like this is unlikely to escape tinkering until it matches most other versions, that are not limited to "tradable". Look at how worried farms are, for example, another relatively cash neutral but cap gain increasing growth (ahem) business.
Correction: without SEEMING exceptionally wealthy or even ramen profitable. By, say, kneecapping your own profit. So that you don't pay as much taxes. Which is the entire problem we're trying to solve.
In practice, these people ARE wealthy. Just perhaps not on paper (depending the paper you look at). Of course when you observe their life, they are obviously filthy rich.
So we have an accounting problem. The papers don't accurately reflect the reality.