People like Musk leverage their paper wealth into real (risky) loans and the like to support their business ventures (and personal lives)--part of the "socialize risk, privatize profits" model of pseudo-capitalism they practice.

A thoughtless approach to taxing unrecognized gains is not a good idea, but I certainly understand why it might be considered, at least for some minimum threshold. There's already something like this in the way some stock options are handled: individuals are taxed at exercise on the difference between the FMV and the strike price, whether they sell or not. I don't see why a similar principal couldn't be made to work with actual equities, at least for some high-value accounts/holdings.