Capital Formation Incentive Act

Capital Formation Incentive Act - Amends the Internal Revenue Code to: (1) exclude from gross income up to $500 of interest and dividends received on savings deposits with a financial institution; (2) exclude from gross income up to $1,000 of amounts realized as gain by an individual from the sale or exchange of stock or securities which are capital assets in the hands of the taxpayer; (3) reduce the corporate normal tax and the surtax and to increase the corporate surtax exemption; (4) increase the carryover period for unused investment credits; (5) exclude from gross income dividends paid to an individual by a domestic corporation in an amount up to 25 percent of the taxpayer's taxable income; (6) allow corporations a deduction for dividends paid on preferred stock; and (7) allow 12 month amortization of pollution control facilities.