Wealth = Total Assets - Total Liabilities

Say I own a farm and I have a tractor worth 500 thousand dollars but I also have a 400 thousand dollars loan on it. Then yes I have 500 thousand in assets but only 100 thousand in wealth contribution. However say I own farmland for 12 million dollars and I have no loans on that farmland (as is quite common if the farm was inherited) then for that 12 million worth of farmland, asset = wealth. Same is true for the grandma example if she doesn't have a loan on the house.

A progressive wealth tax is a good idea however I agree.