I see important benefits, and big risks.

What stops the government from taking more money in ways that it doesn't classify as taxes? E.g. civil forfeiture?

It could increase hostility to new immigrants. That might be solved by taxing people when they immigrate. I'm unsure how to evaluate the effects of those taxes.

the one main reason to expect the government to shrink is that it acts irresponsibly and politicians take out debt with no good plan to pay it back. However, if this happens, shouldn’t we celebrate that the government is shrinking?

I don't know. Does it imply that the government gets taken over by a government that can afford more military spending?

You make it sound like the only effect of the government owning a sizeable percentage of the companies in a economy would be that the government gets revenue. In reality it also creates a strong incentive for the government to make sure that the companies it owns can outcompete the other companies. That likely has bad effects on the quality of the laws. 

In 2018, US households' total wealth was $98 trillion. Federal government spending in 2018 was $4.094 trillion. If we take the standard investment advice and assume that the government can spend 4% of its savings each year, that means the government would need to acquire $102.35 trillion in this one-time taxation. The math does not work out. (I picked 2018 simply because it was the year for which I found total wealth quickest in a google search. The federal budget has only grown since then.)

This does not work without a drastic reduction in total government expenditure. The reason is that the majority of "wealth" is in the form of individuals' earnings potential, but this can't be owned (or rather, owning a share of someone's earnings potential is just income tax under a different name).