Small Business Free Enterprise Act

Small Business Free Enterprise Act - Title I: Incentives - Subtitle A: Social Security Tax Reduction - Amends the Internal Revenue Code to eliminate employee and employer social security payroll taxes for employees of qualified small businesses.

Subtitle B: Reduction in Capital Gain Tax Rates - Revises the computation of the alternative tax for the corporate capital gains of a qualified small business. Defines "qualified small business" as an entity which: (1) is actively engaged in a trade or business; (2) has no more than 20 employees during the taxable year; and (3) receives no government subsidies, grants, loans, or loan guarantees.

Increases the deduction for the capital gains of an individual taxpayer who sells or exchanges qualified small business property.

Exempts sales or exchanges of qualified small business property from the minimum tax.

Subtitle C: Corporate Rate Reduction - Lowers the corporate income tax rate for qualified small business corporations to five percent of taxable income.

Subtitle D: Other Incentives - Allows a qualified small business to write off the entire cost of a business asset as a depreciation expense in the first year after such asset is placed in service. Allows a full investment tax credit for such asset despite the taxpayer's election to use accelerated depreciation.

Allows a qualified small business to elect to compute taxable income: (1) under the cash receipts and disbursement method of accounting; and (2) without any requirement to use inventories.

Exempts qualified small businesses from the Federal minimum wage laws and the Occupational Safety and Health Act.

Title II: Effective Dates - Sets forth effective dates for this Act.