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The US would be unable to collect taxes on Chinese citizen in China, because China is a sovereign power. States (American States) are not truly sovereign because the are legally and politically inferior to the federal government.

An income tax, in all its forms, is a direct tax. Excise taxes are different. There was some archaic excise tax concept that essentially defined it as any indirect tax on something not realted to real property. But the real nature of an excise tax has more to do with the fact that it's independent of value. That's really the key, if the income tax was $10 per person per day worked, it would probably hit the definition of an excise tax.

Actually, you're mistaken. The US Constitution was designed as an agreement among the 13 soverign states to delegate certain specific powers, such as coining money or making foreign treaties (a complete list is in Article I, Section 8) to a central government in order to facilitate cooperation and commerce among the soverign states.

In those delegated areas, and those areas only, is the Federal Government superior to the state governments. States may not coin money because they gave up that power willingly under the Constitution. And as clarified by the Tenth Amendment, any power that was not specifically delegated to the federal government is retained by the state.

The reason that the US can't legally levy and collect taxes on a Chinese citizen in China is not just because China has an army to stop it, it is because the Constitution sets forth the legal limits on the power of the Congress, defining its jurisdiction.

The US Congress has no jurisdiction in China, and neither does it have jurisdiction over intra-state commerce, such as that between a California employeer and his California-resident employee.

This is why the Title 26 statues and their associated regulations define a "source" of income as having only to do with various kinds of foreign and posessions commerce. This is the basis on which Larken Rose has not filed a return or paid income tax since 1997 and has yet to be taken up on his repeated requests to the IRS to prosecute him.