If you're taxing wealth (and not income) then switching stocks into cash doesn't change the wealth. Then use the cash to pay the taxes which reduces the wealth.
And the answer to that was "if you're so afraid that selling will tank the value of the stock, then we [the government] will happily take your taxes as stocks directly, and we take on the risk that selling it will reduce its value".
Yes indeed. It's basically saying "don't bother starting everything because the government will gradually just own it all anyway".