At zero salary, contributing their knowledge, their time and their efforts to help their fellow Canadians.
At the government level we have had to cut back because of economic necessity. We are now calling on the government to increase the tax incentives available for charitable donations in order to help these voluntary organizations and charitable agencies. They impact so vigorously on the lives of each one of us.
We have looked at a number of proposals. We have 10 recommendations. Some are designed to help the major foundations and our major institutions in health and the arts get some endowment funding, but they also apply right down to the United Way and the smaller charities; enhanced tax incentives which we believe will not be costly but will help to mobilize the funds to enable the voluntary and charitable sectors to do those thing which government no longer can do.
Having discussed these six priorities, children in poverty, the disabled, literacy, students, research and development and the charitable and voluntary sectors, let me go back to talk a little about our tax levels in general. There were many people who came before us and told us that we had to reduce their payroll taxes and income taxes.
Since 1980 Canada's overall level of taxation in relation to the size of our economy has gone up about 20 per cent, whereas in the United States it has remained fairly constant. Overall now we are about in the middle of the G-7 countries in spending, with 35.4 per cent of our GDP coming from taxes. In the United States, however, this figure is 27.6 per cent, 30 per cent lower than in Canada. This is the group we have to compete with because 80 per cent of our trade and investment is with the Americans.
When we look at the individual taxes, in Canada our personal income tax rates are 13.4 per cent of GDP whereas in the United States they are 9.8 per cent. We are significantly higher in terms of personal taxes. In terms of corporate taxes, our level is just the same, 2.5 per cent of GDP. In terms of payroll taxes, we are actually below where the Americans are. We are at 6.1 per cent of GDP and they are at 7 per cent.
With respect to the necessity for being competitive in terms of job creation, our corporate taxes are comparable to those in the United States in terms of overall levels and our payroll taxes are actually lower. This is one of the reasons we cannot conclude at this time that we actually need a cut in payroll taxes in order to be competitive. What we have done-