This feels like the cleanest way. Trying to tax unrealized gains becomes a clusterfuck situation, especially for private companies and illiquid assets, because how will the valuations be done? This way all the mechanisms are already in place.
The way to fix this problem is to make borrowing an amount in excess of your basis in a stock taxable. In other words, if you have $10 billion of stock in a company you founded with zero basis, loans secured by the stock should be taxable as if you sold a like amount of stock. So, for example, if you borrowed $1 billion you would have a capital gain of $1 billion. This would be both fair and practical to implement.