It's not confiscating a fraction of Tesla, it's forcing Elon to give up some of his share of Tesla. He doesn't give it to the government, he sells it. To whoever wants to buy.

Could also take dividends, that would be more of a tax on the company itself which is what people usually object to in this discussion. Now the company basically can't grow as fast because it has to satisfy the tax burden for the owner. But that's a choice the owner makes.