What is an acceptable amount of money to ask for in a pay raise?

If you were to come to my company and apply for my position you would be told that the pay is from $16-18 an hour. I think everyone actually starts at $16 though. I put in my resignation yesterday because my director is refusing to give me a pay raise. My immediate boss doesn't want to lose me. He asked me to come up with what my minimum accpetable would be so that he can take it even higher than the director to keep me. I told him I wanted my regular annual raise (3%) and an additonal $1 per hour. This will take me up to $17.50, the way I see it if that if the company sees me as one of the best in my position and a valuable asset I should be getting paid on the high end of the curve not the low end. This is my first civilian job (prior military) so I'm not sure if this is a silly way that i'm looking at things. Right now our company really does need me and I realize that, but how can i trust my company if those that run it aren't looking out for me right?