Or is it better to let people like Elon do what he thinks is best with that capital?
I'll side with Elon on this one.
It's not all or nothing, of course; Musk has plenty of resources regardless.
It's kinda like someone parking illegally and the police being unable to fine the driver. So instead they start bribing the driver so he stops parking illegally.
If Elon wants to create a charitable foundation with the mission of "Make humans a multi-planetary species", with himself as the chief executive, then society would probably be happy to let him transfer his wealth into that foundation (tax free) and continue making decisions about how it is spent.
So long as he's not infringing on the rights and freedoms of others in an unjust manner, why should he have to jump through hoops like that?
If someone succeeds in a country like America, it is because they have benefited from the roads and schools and legal system etc. that the government has put in place, paid for by taxation. If Elon is more wealthy than most people, it means he has benefited more from these services than them, and thus it is natural to expect him to pay more.
The question then becomes "How does society determine how much to bill Elon for?", and there are valid reasons to propose taxes based on income, or wealth, or consumption, or land, or some combination, or some alternative ways of generating revenue, such as only taxing corporate profit.
Ultimately these practical questions are for the people and their elected representatives to answer, but if the answer is "Money in your bank account is taxed, but money in your non-profit charity's account isn't", then Elon is welcome to jump through that hoop to reduce the money that goes to the government.
Anyway, plenty of other people manage to be motivated enough to benefit society without ever earning a single billion (and some people manage to earn or inherit billions without having a net positive contribution to society whatsoever).
It's better to tax away a percentage of his wealth and collectively decide how to use it. Elon Musk shouldn't get a bigger say in how to run our society simply because he has the most money.