Quote Originally Posted by QuintusJulius-Cicero
Extermination population might bring vast amount of cash for the short term but could be damaging for the long term since you collect more tax if the population is significantly bigger. I rarely exterminate settlements that have the same culture as me. As I already said the sea is paved with money, especially the Agean.
Taxation does not raise linearly with population - past a certain level of population, it levels off dramatically, so exterminating a city of, say, 30,000 population doesn't gimp its revenue all that much. I believe that calculations have been run as to how big a city has to be for allowing it to rebel and then exterminating it to be more economically effective than leaving it high pop, but I can't for the life of me remember the exact result. I do know that if the city is hard to control and grows fast, it is likely to be more economically viable to exterminate it just because of the upkeep on the massive garrison it requires - not to mention the fact that you can't really defend a city garrisoned by a full stack of 20 peasants from enemy assault.