The extant evidence is mixed on whether companies respond to tax incentives when making capital structure decisions. We argue that it is important to examine capital structure choices in the context of external financing needs, such as when funding corporate investment. We examine 99 years of panel data for US public companies and find that firms use more debt to fund investment when corporate income tax rates are high, consistent with the tax hypothesis. We study, for the first time, the two largest tax hikes of the last century (one in the 1940s, one in the 1950s). Consistent with tax incentives, we find that firms increase leverage in response, and these effects are concentrated among firms with the highest needs for investment funding. A battery of tests shows that these results are unlikely to be driven by changes in economic conditions or investment opportunities associated with the coincident war efforts.