To amend the Internal Revenue Code of 1986 to provide that the adjusted gross income of an individual shall be adjusted to reflect the value of such income relative to the cost-of-living in the area in which such individual resides.

Amends the Internal Revenue Code to redefine "adjusted gross income" as the product of the excess of gross income over specified deductions and the area cost-of-living multiplier (currently, gross income minus specified deductions).

Requires the Secretary of the Treasury to prescribe an annual cost-of-living multiplier for each area of the United States by dividing the average cost-of-living for the United States for the preceding calendar year by the cost-of-living for such area for the same period.

Bases the cost-of-living of an area on the average of retail market prices for such area in a 12-month period.

Requires the cost-of-living multiplier for areas outside of the United States to be one.