There is a small effect...
...when you take a combination of tax policy and interest rates...you can >marginally< affect capital formation....usually in timing only...by delaying certain spending...
However, that effect is secondary..as most major capital formation is a function of the underlying competitive conditions in the market...
For example...IF there is a demand for 1 million pounds of di-methyl doorknobs and production capacity of 700000 pounds....someone, somewhere will fill that capacity void...OR...if a technology advancement is made that allows a process to improve into a low-cost position...that capital formation will occur REGARDLESS of government policy...assuming...of course...that the policy is within established norms. (30-50% tax rates...5-15% interest)
