A bill to amend the Internal Revenue Code of 1954 to make certain changes in the definition of adjusted gross income, to increase the percentage standard deduction and the low income allowance.

Amends the Internal Revenue Code to allow the deductions for home mortgage interest and charitable contributions to be subtracted from gross income to determine taxable income in the case of individuals electing the standard deduction.

Increases the percentage standard deduction to 20 percent of adjusted gross income, but not to exceed $5,000, or $2,500 in the case of a separate return filed by a married individual.

Increases the low income allowance to $2,100 in the case of a joint return or a surving spouse, to $1,700 in the case of an individual who is not married, or to $1,050 in the case of a married individual filing a separate return.

Ties future changes in the percentage standard deduction and the low income allowance amounts to changes in the price index for the preceding year.

Makes technical and conforming amendments.