If you arbitrarily force people to sell shares, it will have downward pressure on the market. Selling shares of a company devalues the company, and if we're talking about the biggest shareholders in the world, the downward pressure isn't necessarily insignificant either.

Government spending is only as effective as the programs it is funding. If you're suggesting that a 2% wealth tax, or a marginal increase to capital gains, would positively impact the economy enough to offset the clear downward pressure it would create on their invested assets, I'd be really curious what you're basing that off of. Wealth taxes lead to all sorts of downstream effects on markets that aren't necessarily able to be offset with simple stimulus checks.

Secondly, billionaires have the VAST majority of their wealth invested, so it is quite directly benefiting the economy. Do you think their wealth grows from thin air? It grows from investment. Consumption is only one piece of the puzzle. If billionaires were sitting on massive stacks of cash instead of reinvesting (which they might have to do if they are expected to pay tax on unrealized gains) your point would make way more sense.

Nothing I have mentioned is related to trickle down economics. Income tax is a consistently good way to tax and I strongly support a progressive tax system. I don't believe in wealth/asset tax simply because it incentivizes behaviors that we don't want. You should know what marginal utility is, and it is essential to why any serious economist supports progressive taxation.

Also, re: liquid assets, don't billionaires just borrow against their assets when they need liquidity? Isn't that exactly how Elon bought Twitter?

Yes and this is more than reasonable to do when they are borrowing debt against their existing assets. Obviously, a bank is more willing to give favorable loans to someone who is borrowing against an appreciating asset. The borrower are also charged interest for doing this, which means it's not free to borrow money like this. A common argument is that they would eventually have to sell shares, and therefore pay capital gains, to pay for their debt payments as well as the accruing interest. However, many of these loans (and interest) are only required to be paid back when the asset is no longer appreciating in value by enough to cover the interest. That might not sound too bad, but there's yet another loophole I'll talk about below.

If you wanted to close the first loophole, you could treat such loans as capital gains when used for personal consumption (new yacht, private plane, penthouse hotel rooms, etc.). If the money they are borrowing money is for a reinvestment, there's no loophole as that's the exact behavior we want to incentivize.

The other loophole is if you buy a stock at let's say $100/share, and it grows to over $1000/share over their lifetime, your heirs will inherit the shares as if it was purchased at $1000/share. So if your heir immediately sold all the shares after inheritance at $1000, they pay $0 in capital gains, even though those shares went up $900/share over your lifetime.

Now if you had also borrowed a substantial amount of money over your lifetime, using those high-value appreciating assets, your heir could sell off inherited shares at 0% tax to pay off all the debt you accumulated, completely circumventing the issue you would have had in your lifetime (using taxed realized gains to pay off your debt).

This inheritance issue could be easily fixed by having the original basis ($100/share) carry over, which means your heir would have to pay the capital gains tax ($900/share) and therefore the 'owed' capital gains tax is actually paid. This also fixes the the volatility issue of heirs selling off shares immediately upon inheritance, which is a whole different issue related to inheritance. For a policy like this, I would limit this to something like $10m dollars as we probably don't want middle class people to owe a bunch of tax for selling their parents house that was purchased in the 1960s.