Where do thoughts arise?
Thoughts are created by the mind's natural activity. It's what the mind does. It's like a muscle or hair follicle. What matters is our attachment to that thought. Karma is simply energy and attachment and by attaching ourselves to the thoughts of a temporary vehicle (our body and mind), we are destined for suffering. 

If you're a fellow geek, you may get a lot out of the research from Dr. Fred Travis. He studies the brain and has done a lot of research on meditation and brain activity. He basically shows that meditation helps us rise past lower states of consciousnesses by disconnecting that "word = object" mentality. See Youtube, Brain Plasticity and Transcendental Meditation with Dr Fred Travis.

Letting go of karma is thus attaining a higher form of humanity.