The article explores how investing in new technology can drive economic growth. By studying the relationship between research spending and building new capital, the researchers found that tax rates can impact growth differently depending on how easily research can replace new capital. Research subsidies are more effective than investment tax credits in boosting growth. Surprisingly, raising capital tax rates can actually increase economic growth, even without external factors. In some cases, having multiple tax rates on capital can achieve the same growth results. When positive externalities are present, using capital taxes instead of subsidies can lead to optimal growth rates.