INCREASE IN PERCENTAGE STANDARD DEDUCTION.

SEC. 202. INCREASE IN PERCENTAGE STANDARD DEDUCTION. (a) Increase.— Subsection (b) of section 141 (relating to percentage standard deduction) is amended to read as follows: “(b) Percentage Standard Deduction.— The percentage standard deduction is an amount equal to 16 percent of adjusted gross income but not to exceed— “(1) $2,600 in the case of— “(A) a joint return under section 6013, or “(B) a surviving spouse (as defined in section 2(a)), “(2) $2,300 in the case of an individual who is not married and who is not a surviving spouse (as so defined), or “(3) $1,300 in the case of a married individual filing a separate return.” (b) Conforming Amendment.— Subparagraph (B) of section 3402 (m)(1) (relating to withholding allowances based on itemized deductions) is amended to read as follows: “(B) an amount equal to the lesser of (i) 16 percent of his estimated wages, or (ii) $2,600 ($2,300 in the case of an individual who is not married (within the meaning of section 143) and who is not a surviving spouse (as defined in section 2(a))).”