Earlier quoted context omitted.
I think partly the historical legacy, but also the ease of enforcement and the fact that lower tariffs and services have trended together. Collecting taxes on goods flowing through a limited number of physical locations is much much easier than trying to audit the client list of a huge number of foreign service providers. Agreed that other countries are considering this.
You don't need to hit a huge number of service providers because the USA market is highly concentrated. That's why you read things like «The Anti-Coercion Instrument (ACI), a nuclear option that has yet to be deployed, would empower the EU executive to hit U.S. service industries such as tech and banking». https://www.politico.eu/article/eu-trade-bazooka-anti-coerci... You can just pick the top 10 biggest financial a…
The US market is highly concentrated... right now because there are no tax benefits to being diverse. Apply significant tariffs to services and watch thousands of micro-service providers bloom.
There's really no "and be done with it" when it comes to tax policy. It's always an arms race.
None of this is to say that you couldn't tax service providers. Just that it's likely not as simple or obvious what would happen if you tried.