To amend the Internal Revenue Code of 1986 to provide a deduction for domestic business income of qualified small businesses.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Tax Cut Act''.
SEC. 2. DEDUCTION FOR DOMESTIC BUSINESS INCOME OF QUALIFIED SMALL BUSINESSES.
(a) In General.--Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
``SEC. 200. DOMESTIC BUSINESS INCOME OF QUALIFIED SMALL BUSINESSES.
``(a) Allowance of Deduction.--In the case of a qualified small business, there shall be allowed as a deduction an amount equal to 20 percent of the lesser of-- ``(1) the qualified domestic business income of the taxpayer for the taxable year, or ``(2) taxable income (determined without regard to this section) for the taxable year. ``(b) Deduction Limited Based on Wages Paid.-- ``(1) In general.--The amount of the deduction allowable under subsection (a) for any taxable year shall not exceed 50 percent of the greater of-- ``(A) the W-2 wages of the taxpayer paid to non- owners, or ``(B) the sum of-- ``(i) the W-2 wages of the taxpayer paid to individuals who are non-owner family members of direct owners, plus ``(ii) any W-2 wages of the taxpayer paid to 10-percent-or-less direct owners. ``(2) Definitions related to ownership.--For purposes of this section-- ``(A) Non-owner.--The term `non-owner' means,...