At least in the case of stock, it’s possible they can’t sell it to pay the tax

That seems like a buyer beware situation. Nobody forced them to invest money in it, and if they lose out in the end that is the risk they take, the same with any other investment. You can't buy a piece of commercial property and not pay any taxes, or start a business and then claw back taxes you already paid because it failed later on down the road.

Would you only apply this to stocks acquired after the new tax law was passed then?

It would probably need a grace period so things don't go crazy, but after that then yes. It would also have the benefit of pumping stocks being lower and more risky, and could help prevent stock bubbles from rising so big and fast.

That is typically the case (depending on the timeline) for all but publicly traded or relatively sought out/well known private firms. Even for many of those, it’s not going to be easy.

You can’t just go out and start selling stock to the public without a huge amount of legal paperwork.

Because the valuation of equity is notional only. It may not be remotely realizable now or ever. Furthermore, it may not be possible to use it as collateral for a loan for both legal and practical reasons. Some notionally high value assets have no liquid market. It make take a decade to find a real buyer. The large majority of assets held by wealthy people are non-liquid, in the US most studies put it in the 60-70% range.

Your paycheck is denominated in cash money. It can’t go to zero or be non-liquid for years like an investable asset. That’s a rather important distinction.

Allow for deferral, but at the risk-free rate. If the asset goes bust, the tax isn’t owed.