The economics which determine where the “line” is, is set by the market of people/companies willing to move into and invest in the city, the services and infrastructure and regulation and talent pool they require to be able to function effectively in the city, and the tax burden they are willing and able to shoulder relative to other available tax/service/infra/talent bundles available elsewhere and their own profit margins.

And all that is a calculation companies perform within and between municipalities when selecting where to grow and invest.

And also a similar calculation made by the residents who move into and out of a city based on the services, infrastructure, tax rate, and companies that are present.

Some economicist must have modeled all this and drawn all the supply/demand curves, and the equations which show how certain curves shift in response to taxes or stimulus or investment in any of the various areas.

The short answer is at the bottom of the letter — a 10:1 return on investment would have been a massive win for any development agency.

Maybe there is a way to model the breakeven point accounting for all the various future cash flows. Maybe we can make a list of all the similar projects and their expected ROI and rank them, e.g. as a dollars per job created number, or a ratio of tax dollars forgiven versus tax dollars collected.

But very subjectively a good deal is one that leaves the community better off in the long run. There’s no way to know this a priori, but all the evidence points to this deal being a truly massive loss for this community.

Amazon can do things for a locale that no amount of simple tax revenue can do. Because they can profitably employs tens of thousands of people. It’s actually the most important function of a city, to enable profitable sustainable jobs for its residents. It’s not, in fact, simply all about the Benjamins.