Yes, in fact, consumption is a more stable source of revenue than income. A recent study by American Farm Bureau economist Ross Korves shows the FairTax base was less variable than the income tax base. Why? Because during difficult times due to loss of a job or an inability to work, people may not have as much income, or may have no income at all. They borrow funds or use savings. They may not have earnings, but they still continue to consume. Korves’s Figure 2 below shows the yearly changes in the tax base, adjusted gross income (AGI), under the current tax system for 1971-2001 and changes in personal consumption expenditures (PCE) of the same time period.

Figure 2: Stability of the tax base 1971 to 2001