You should have to pay on the yearly difference in value, and if that means you have to sell some to pay the tax then you should just get over it.
There's a much better way.
Don't tax the dollar value of the shares. Tax the shares themselves. Don't demand the liquidation of the shares to pay the dollar value of the tax. Instead, just tax the shares themselves: confiscate the same percentage of the shares held, then have the IRS liquidate the confiscated shares slowly over time.
We can exempt $10 million from the portfolio of any natural person, then tax proportionately from every issue in that portfolio. No exemptions for artificial, corporate entities.
Basically, stocks, bonds, real estate, and other financial assets (the "ownership of the means of production") should only be valuable to the working classes.