What does “Income generated in the U.S.” mean?
It means you must pay federal (and possibly state) tax on any income you produce in America -- including Internet and mail-order sales. Tax treaties may keep you from having to pay tax on it again in your own country, or may not.
"... until they collapse too!!!  This is ""Luft Gesheft"": German/Yiddish for ""making money out of thin air"".  Money should be made by making things and building things - adding value to something.   Apple Computers is one example - they make real money." Government's tax citizens and businesses in their currency. Earnings (even earnings in cryptocurrencies) are taxable income. "Regardless of if the 'higher profits' are create from higher volumes and more workers, the key word there is PROFITS - not 'revenue', not 'income' or any similar word. PROFITS - a word used to describe the amount left AFTER paying expenses - such as the salaries of those additional workers (if any).  The point is, the worker deserve a share of those profits. It is their work that has made them - in addition to the work of the CEO, of course, but still...the CEO could not have created 'better margins' or done 'better deployment of capital' if it were not for the efforts of those workers in the first place.  This is the main problem with the economy right now. No one feels the responsibility to those who have helped them succeed. They keep using a 'slash and burn' financial strategy - slash salaries and benefits and burn up your labor force to extract every dollar you can for the top. The only problem is, now they're running out of things to slash and the workers they've burned have nothing left. And they wonder why the economy is in the crapper.  I keep being reminded of a quote from Ladyhawke as said by the evil bishop:   ""I raise their taxes, only to be told there's nothing left for me to tax. Imagine.""" Here's how the CBO says the top 1% got their income in 2013 (latest data):      Source|% from source :--------|---------: Cash Wages and Salaries|33.4% Business Income|23.2% Capital Gains|19.1% Capital Income|11.2% Corporate Tax Borne by Capital|7.3% Other Income|3.2% Employer's Share of Payroll Taxes|0.9% Employee's Contributions to Deferred Compensation Plans|0.7% Employer's Contributions to Health Insurance|0.5%   And here are there definitions of the types of income:  * Labor income—Cash wages and salaries, including those allocated by employees to 401(k) plans; employer-paid health insurance premiums; the employer’s share of Social Security, Medicare, and federal unemployment insurance payroll taxes; and the share of corporate income taxes borne by workers.  * Business income—Net income from businesses and farms operated solely by their owners, partnership income, and income from S corporations.   * Capital gains—Profits realized from the sale of assets. Increases in the value of assets that have not been realized through sales are not included in the Congressional Budget Office’s measure of market income.   * Capital income (excluding capital gains)—Taxable and tax-exempt interest, dividends paid by corporations (but not dividends from S corporations, which are considered part of business income), positive rental income, and the share of corporate income taxes borne by owners of capital.   * Other income—Income received in retirement for past services and other sources of income. &gt; If a business operates in the US, makes money here, has physical infrastructure and employees here, and utilizes our infrastructure I don't see how you can say that the US doesn't deserve any of that.  For fuck's sake, this isn't rocket science. Taxes made on profits from goods and services sold in the U.S. are ALREADY taxed in the U.S.  We are talking about profits from GE making engines in Germany and selling to the EU. "Equity is the term to make things balance. In a simple transaction, you get $100 paid to you. Income goes up by $100 and the asset of whatever bank account or petty cash drawer you put it into also goes up by $100. Equity is unchanged. If for some reason you had to take some income into your books, but no asset increased, no debt decreased, and you had no way to take an offsetting expense into your books, then this would lower your equity. How else to explain having ""earned"" $100 but having nothing to show for it?" "Here is where I am confused. On the income statement I am looking at it has a line item in cogs that is ""change in jobs in progress"".   Change in JIP =  (Starting raw materials, wip, and finished goods) - (Ending raw materials, wip, and finished goods) for the accounting period.  From what I researched cost of goods manufactured is added to cogs:  ""The formula for the cost of goods manufactured is the costs of: direct materials used + direct labor used + manufacturing overhead assigned = the manufacturing costs incurred in the current accounting period + beginning work-in-process inventory - ending work-in-process inventory.  A manufacturer's cost of goods sold is computed by adding the finished goods inventory at the beginning of the period to the cost of goods manufactured and then subtracting the finished goods inventory at the end of the period.""  So it isnt wip that is in the income statement it is change in inventory. Why do they include the ""change of inventory"" in cogs? Wont this just be material and labor that should be in for the next accounting period cog calculation?" It's important to note that the US is also the country that taxes its expats when they live abroad, and forces foreign banks to disclose assets of US citizens.  Americans are literally the property of their government. America is a tax farm and its citizens can't leave the farm. Wherever you go, you are owned.  And that now appears to be true of your Bitcoin as well. Even if you spend 50 years outside the USA, your masters want a piece of what you earn.  Land of the Free. If you make 100K in the U.S., you are most definitely NOT paying 25.7% tax federally. Only money that you made over 37.5K is even charged at 25% AND you didn't even factor in that you get deductions which decrease your effective tax rate. Where are you pulling your numbers? "In the United States tax law, a group of people who are neither an individual nor an incorporated entity is called ""partnership"".  Here's the IRS page on partnerships. Income derived by such a ""meetup.com"" group is essentially a partnership income with the group members being the partners. However, as you can see from the questions in the comments, the situation can become significantly more complex if this partnership is not managed properly." &gt; 73% of Americans were in the ‘top 20%’ for at least a year  Well, sure.  [The top 20% currently begins at $92,000](https://en.wikipedia.org/wiki/Income_in_the_United_States).  All an American needs to do to qualify for that 73% is sell their house with ~50% equity at some point in their life since the IRS considers that income.  Great logic of this article: liquidate your primary investment and \*poof\* you're wealthy.  Even [the authors of the study cited in this article say](http://news.cornell.edu/stories/2015/01/hirschl-research-finds-many-join-1-percent-few-stay-long):  *“It would be misguided to presume that top-level income attainment is solely a function of hard work, diligence and equality of opportunity,” they write. “A more nuanced interpretation includes the proposition that access to top-level income is influenced by historic patterns of race and class inequality.”* "Neither is synonymous with ""the American Dream"" -- self employment is not necessary to achieve it.  &gt;The American Dream is a national ethos of the United States, the set of ideals (democracy, rights, liberty, opportunity and equality) in which freedom includes the opportunity for prosperity and success, as well as an upward social mobility for the family and children, achieved through hard work in a society with few barriers." From tax perspective, any income you earn for services performed while you're in the US is US-sourced. The location of the person paying you is of no consequence. From immigration law perspective, you cannot work for anyone other than your employer as listed on your I-20. So freelancing would be in violation of your visa, again - location of the customer is of no consequence. ''that WE THE PEOPLE did not become owners of the PUBLICLY TRADED companies.'' This statement is inaccurate. The government received stocks, corporate bonds and the likes for every company they helped during the last financial statement. One article I read even suggest that we made a return on our investment with the capital gains , dividend and interest we received.  Also dividend is a form of income so you're not giving a new idea you are just changing a word.  How would you calculate those dividend? With what money would you pay such a program? "In that example, ""creating money"" could be used interchangeably with ""making promises"".  There's no inflation, and no problem, so long as everyone keeps their promises. Which sounds like a horrifying thing to say about the foundations of the economy, but the remarkable thing is that people mostly do."