A bill to amend the Internal Revenue Code of 1986 to allow a deduction for dividends paid by corporations.

Amends the Internal Revenue Code to allow a tax deduction for dividends paid by corporations. Requires each corporation to establish a qualified dividend account. Makes the following corporations ineligible for the deduction: (1) a regulated investment company; (2) a real estate investment trust; (3) an S corporation; (4) cooperative organizations; and (5) a foreign sales corporation (FSC) or domestic international sales corporation (DISC).

Provides for an increase in the withholding tax on dividends paid to nonresident aliens or foreign corporations to reflect the dividend paid to nonresident aliens or foreign corporations to reflect the dividend paid deduction.

Requires, in the case of the acquisition of assets of a corporation by another corporation, that the acquiring corporation carryover the qualified dividend account.