I don’t know how else it would work.

That's my point, actually. It doesn't work in practice. Given that ultimately, it's third parties that determine the value of things you own that are on the open market, placing hard limits like that would open the door to massive gaming of those systems. It'd also be practically impossible to enforce in any real way, as that would require an actual full audit (net worth figures you see in the media are educated guesses, not enough certainty for the application of law), during which the valuation of the assets in question can be manipulated downward in myriad ways.

The alternative is that a handful of people are permitted own and control most of society’s resources while everyone else subsists on scraps.

The poor aren't poor because the wealthy are wealthy. Like I said, the vast majority of the wealthiest people's wealth is not cash money, it's a theoretical price tag going up over time. Over the past hundred years, the number of billionaires per capita has increased 7x, but a hundred years ago, poverty was MUCH more prevalent than it is today.

The two simply aren't connected the way you assume they are, because wealth isn't the zero-sum game you assume it is.

The way I imagine it working is that if you own stock in a company that now went up in value and now pushes your net worth above the cap, this puts you in a position where you now have more control than society permits you to have.

Really take a moment to think about this concept. You own a thing that's valuable to others. If it becomes too valuable (a threshold defined completely arbitrarily, by the way) to others, "society" no longer "permits" you to continue owning it?

In this case, some of your stock is sold off for taxes or parts of the company are split off and sold for taxes.

In other words, the government will literally steal your stuff if the public decides it's more valuable than the amount the government arbitrarily decided is too much?

the government gets tax money to fund social programs

Extremely wishful thinking. You're actually more likely to net a loss of tax revenue overall attempting this, as people nearing the cap will rearrange their assets to avoid going over the cap, so no new revenue will be coming in, meanwhile the logistic cost of even determining whether someone is over the cap is certainly going to cost much more taxpayer money than what is brought in (which, again, is most likely to be literally zero or very close to it).

There is a reason that every country that's previously attempted a policy like this aimed at the wealthiest has either since repealed it, or changed it such that it no longer targets the wealthiest (i.e. a 'wealth tax' that the middle class is made to pay as well). I'm interested in learning from their mistakes, not repeating them.

Not sure how well all that would work in practice

That's for sure.