Not a lawyer or any knowledge about US laws but isn't this basically impossible to get through or hold up in any court ever?

How would a law distinguish between investments and other property? What if homes increase in value and whole neighborhoods have to sell? What if I just buy a bottle of wine and forget about it in my basement and it increases in value? Should people show their ID at the supermarket to tell the IRS?

I really don't see this happening especially without a long legal fight.