I need a Loan

[TinCow]

The way I see it, is that no matter what the population level, nor the taxes received from that population, if that City operates at a LOSS, its an albatross.

Eliminating that Loss, even if it's just a Zero sum gain, Overall, your Income *should* result in a Net Gain by the amount of the Loss.

What you're missing is that the upkeep load will shift. While the newly de-populated city will be making a profit, the other cities in your empire will see a decrease in their income. Unless you lost a large number of units in the process, your military upkeep will remain the same. Upkeep is paid by cities in proportion to their population, so think of it like this:

You have two cities, A and B. City A has 75% of your population and City B has 25% of your population. City A has an income from trade, taxes, etc. of 600 and City B has an income of 300. If your overall upkeep is 1000 dinarii, City A will pay for 750 of that (75%) and City B will pay for 250 of that (25%). This means City A will display a loss of 150 dinarii per turn while City B will display a profit of 50 dinarii per turn.

Now, if you exterminate City A such that its population drops to the same as City B, you get the following scenario. Cities A and B now have 50% of the population of your empire each. Thus, they both pay 50% of the upkeep. City A will thus pay 500 and City B will thus pay 500. Since City B has been untouched, its income remains the same at 300 and it will show a loss of 200. Assuming City A keeps the same income, it will now show a profit of 100. As such, even though the numbers make it look like you have 'fixed' City A, you still have the same total income.

However, now take into account the fact that exterimating a city will dramatically reduce its tax income and may destroy some trade buildings, and you see that City A will actually have its income decreased, even if the numbers still 'show' an improvement. When you have a huge empire, this can be particularly hard to spot because the financial 'shift' will be so small for each of your other cities that you probably won't notice the drop. However, the reality is that you have simply shifted the payment burden onto the other cities while reducing the income of the de-populated one.

In simpler terms, income is city specific while upkeep is born by the entire empire. Regardless of how much your city's income changes, the upkeep will remain the same. You can shift it around a bit to make it look prettier, but in the end you still have to pay it.