To amend the Internal Revenue Code of 1986 to allow a deduction for dividends paid by domestic corporations, to reduce the tax on capital gains from assets held for more than 3 years, and to restore the investment tax credit for certain property.

[AI summary unavailable — showing source text] Amends the Internal Revenue Code to permit an income tax deduction in the amount of dividends paid by domestic corporations, except S corporations, regulated investment companies, real estate investment trusts, and personal holding companies. Repeals the income tax deductions currently permitted in connection with: (1) dividends received by a corporation; (2) dividends received by a corporation on the preferred stock of a public utility; and (3) dividends paid by a public utility on its preferred stock. Revises the deductible percentage of amounts received by a corporation from a qualified ten-percent owned foreign corporation. Revises the maximum capital gains rate to limit such tax to the sum of: (1) a tax computed at the rates and in the same manner as if capital gains provisions had not been enacted on taxable income reduced by the qualified net capital gain; and (2) a tax equal to the sum of specified percentages of net gains based on number of years (with a maximum percentage of 23 percent of three-to-six year net gains and lower percentages of gains of more than six years). Restores the investment tax credit for manufacturing equipment.…