We study how changes in relative labor-to-capital taxation affect the direction of technological change, particularly the adoption and innovation of labor-saving versus labor-augmenting technologies. To study these effects, we draw on a stacked difference-in-differences design and variation in the effective relative tax rate across U.S. states. We link these changes to (i) patent classifications into labor-augmenting and labor-saving technologies to study innovation outcomes and (ii) classified microdata from the Longitudinal Foreign Trade Transactions Database to study technology adoption. Our preliminary results so far show limited reduced form effects of increases in relative taxation on the share of labor augmeting patents. We are moving the analysis to the firm level using census data, estimating the adoption of automating technology and using time-varying production function estimation to estimate the effect of taxation on the exponent on labor in the production function.