Big ‘I’ Secures Important Wins With Passage of Trump Tax Package – IA Magazine

When a piece of tax legislation gets nicknamed the “One Big Beautiful Bill,” you can safely assume two things:
it’s politically charged, and it’s going to keep a lot of accountants very busy. For independent insurance agents,
though, the latest Trump tax package is more than just a catchy slogan. It’s a concrete policy win that locks in
a major tax break many agencies have been relying on since 2018 and turns years of lobbying by the Big “I”
(Independent Insurance Agents & Brokers of America) into a tangible payoff.

In July 2025, Congress passed, and President Trump signed, a new tax package centered around the “One Big Beautiful
Bill.” Vice President J.D. Vance broke a 50–50 tie in the Senate, and the House followed with a razor-thin
218–214 vote before the bill landed on the president’s desk on the Fourth of July. The legislation makes permanent
many elements of the 2017 Tax Cuts and Jobs Act (TCJA), including the coveted Section 199A deduction for
pass-through businesses a huge deal for the insurance agencies that make up the Big “I” membership.

What Is the Trump Tax Package and the “One Big Beautiful Bill”?

The Trump tax package of 2025 isn’t a brand-new idea; it’s more like a sequel. The original TCJA, passed in 2017,
slashed the corporate tax rate from 35% to 21%, created new individual rate brackets, and introduced the
Section 199A deduction, which allows many pass-through business owners to deduct up to 20% of their qualified
business income (QBI).

The catch? Much of that law was set to expire at the end of 2025. For independent agencies set up as S corps,
LLCs, partnerships, or sole proprietorships, that would have meant a sharp tax increase just as inflation,
rate volatility, and catastrophe losses were already squeezing margins. The 2025 “One Big Beautiful Bill” solves
that uncertainty by making many TCJA provisions permanent especially the 199A pass-through deduction that the
Big “I” cares about most.

The Big “I” and Its Long Game on Tax Policy

The Big “I” is the national trade association representing independent insurance agents and brokers. For years,
its federal affairs team has pushed Congress to recognize that most agencies don’t look like giant carriers
they’re small or mid-sized businesses on Main Street that file taxes at the individual level. According to the
Agency Universe Study, roughly 86% of independent agencies are structured as pass-through entities, which means
their owners stand to benefit directly from Section 199A.

Since 2017, the Big “I” has treated 199A as a core advocacy priority. It organized fly-ins, coordinated grassroots
outreach, and rallied agents to contact lawmakers about making the deduction permanent. That campaign paid off:
by 2025, nearly half of the House and one-third of the Senate had signed on to legislation supporting permanency
for the deduction, laying the groundwork for its inclusion in the new Trump tax package.

When the final bill passed, the Big “I” publicly applauded congressional leaders including Speaker Mike Johnson
and Senate Majority Leader John Thune along with key tax-writing committee chairs who championed the issue
for small businesses. For independent agents, it was the policy equivalent of hitting a walk-off
home run in extra innings.

Section 199A: The Star of the Show

How the Pass-Through Deduction Works

Section 199A, also known as the QBI (qualified business income) deduction, allows eligible owners of pass-through
businesses including many independent agencies to deduct up to 20% of their qualified business income from
their taxable income. This deduction applies to sole proprietorships,
partnerships, S corporations, and some trusts and estates, subject to income thresholds and various guardrails.

In practice, that means if an agency owner’s qualified business income is, say, $300,000, up to $60,000 may be
deductible under 199A before calculating federal income tax, assuming they meet the other requirements. It doesn’t
reduce Social Security or Medicare taxes, but it can significantly lower the owner’s overall income tax bill.

Why 199A Matters So Much to Independent Agencies

Most independent agencies don’t have the scale or structure to benefit from the flat 21% corporate rate. They’re
not C corporations; they’re pass-throughs that report business income on individual tax returns. The 199A
deduction levels the playing field by offering a meaningful tax benefit to these smaller, locally owned firms.

Since 2018, the insurance industry has viewed the IRS’s implementation of 199A as especially important. Earlier
guidance confirmed that owners and shareholders of insurance agencies organized as pass-throughs could fully
utilize the deduction for their insurance producer income a key clarification that aligned with the Big “I”
position. Making that deduction permanent eliminates a massive cloud of uncertainty hanging over
long-term planning, perpetuation strategies, and hiring decisions.

Key Wins for the Big “I” in the Trump Tax Package

1. Permanency of the 20% Pass-Through Deduction

The headline win is straightforward: the bill makes the 20% 199A deduction permanent for qualifying pass-through
businesses. This means independent agency owners no longer have to
stress about a “tax cliff” at the end of 2025. Instead of wondering whether a future Congress might let the
deduction expire, they can plan around a stable rule set.

Permanency supports:

• Succession planning: Family-owned agencies can transfer ownership with more predictable
  after-tax cash flows.
• Hiring and compensation: Owners can model take-home pay, bonuses, and producer compensation
  with better precision.
• Investment decisions: Agencies can decide whether to expand, acquire, or invest in technology
  without second-guessing the tax environment every election cycle.

2. Locking In Individual and Corporate Rate Structures

The new package also makes current TCJA individual tax rate brackets permanent and retains the 21% corporate
income tax rate set in 2017. While independent agencies structured
as C corporations had already benefited from that lower rate, many firms have a mix of entities or related
service companies. Knowing that top marginal rates and the corporate tax rate are stable helps owners decide
whether structuring as a pass-through or a C corp makes more sense for their specific situation.

For agency groups with multiple locations across states, rate stability at the federal level provides at least
one constant in a world of shifting state tax policies and regulatory pressure.

3. Reinforcing the Small-Business Narrative

Politically, the package positions independent insurance agencies squarely within the “Main Street small business”
story. Lawmakers and administration officials have framed the 199A deduction and related provisions as a way
to support entrepreneurs, local employers, and professional firms that don’t have the resources of big
corporations.

For the Big “I,” that framing matters. It reinforces the association’s long-running message that independent
agencies aren’t faceless financial institutions they are community-based businesses that sponsor Little League
teams, donate to local causes, and help clients navigate risk in everyday life.

Not Everyone Is Cheering: The Policy Debate Around 199A

Of course, not all analysts love the pass-through deduction, and the Trump tax package doesn’t make those concerns
disappear. Research from the Congressional Research Service and various think tanks has raised questions about
who benefits most and how much it costs. Some analyses argue that the 199A deduction disproportionately favors
higher-income business owners and encourages tax planning games, without delivering commensurate growth in
investment or wages.

Others point out that making the deduction permanent significantly increases the long-term fiscal cost of the tax
code, especially if paired with other business-friendly provisions like expanded expensing or interest
deductibility. For critics, the concern is that these benefits come at the expense of revenue that could fund
other priorities or that they deepen the deficit.

In the insurance world specifically, some observers note the political sensitivity of a tax break that’s critical
for independent brokerages but may be vulnerable in future partisan battles. Articles in trade and business media
have warned that elections could determine the fate of deductions like 199A, underscoring how much industry
fortunes are tied to changing coalitions in Washington.

Still, for many independent agencies, the bottom line is practical: with the deduction permanent for now, they can
plan within the rules that exist, while staying engaged in the broader policy debate.

What Independent Agencies Should Focus on Next

1. Confirm Eligibility and Optimize Structure

Even with permanency, 199A is not a “set it and forget it” provision. Agencies should work with tax and legal
advisors to:

• Confirm that their current entity type (LLC, S corp, partnership, etc.) is optimized for the deduction.
• Review compensation strategies for owners versus W-2 wages, since wages can affect how much of the deduction
  is available at higher income levels.
• Understand how related income such as consulting, real estate, or cross-owned businesses interacts with
  QBI and overall taxable income.

The goal isn’t to over-engineer complex schemes, but to avoid leaving money on the table due to outdated structures
or assumptions from pre-2017 tax rules.

2. Integrate Tax Planning Into Perpetuation and M&A

With agency valuations high and private equity still active in the sector, perpetuation planning has become a
central strategic issue. Making the 199A deduction permanent gives owners a clearer picture of after-tax proceeds
from a sale, internal perpetuation, or ESOP-style transition.

Buyers and sellers alike should incorporate the deduction into cash-flow projections, deal structures, and
financing assumptions. For multi-owner agencies, tax-efficient buy-sell agreements and staged ownership transfers
can be designed with the expectation that 199A will remain part of the backdrop.

3. Stay Engaged With Advocacy

The Big “I” win on the Trump tax package is a reminder that advocacy works but it also shows how fragile
victories can be. Future Congresses can always revisit tax policy, particularly if budget pressures increase
or political control shifts. That’s why the Big “I” emphasizes ongoing engagement: talking to lawmakers, showing
up at town halls, and sharing real stories about how tax policy affects jobs and clients.

For agency principals, the takeaway is simple: you don’t have to become a tax lawyer, but you do need to be
aware of the rules, stay connected with your trade association, and make your voice heard when proposals that
affect your bottom line are on the table.

Real-World Experiences: How Agencies Are Navigating the New Tax Landscape

Numbers and statutes are great, but nothing brings tax policy down to earth like watching how real agencies react.
While every firm is different, you can already imagine a few familiar scenarios playing out across Main Street.

Case Study 1: The Midwestern Family Agency

Consider a third-generation independent agency in a small Midwestern town. The agency is structured as an S
corporation, with two siblings holding most of the stock and a younger producer preparing to buy in. Before the
2025 bill passed, they were nervously modeling a world where the 199A deduction disappeared at year-end, pushing
their effective federal tax rate several points higher.

After the Trump tax package, their CPA tells them that the 20% deduction is now permanent, subject to the existing
income thresholds and wage rules. That changes the tone of the conversation. Instead of racing to close a
perpetuation deal before a potential tax cliff, they can structure a slower, more manageable buy-in over several
years. The younger producer can take on ownership without watching too much of their compensation vanish into
unexpected tax.

The agency still has work to do cleaning up shareholder agreements, reviewing compensation policies, and
rethinking their retirement timeline but they’re doing it with a clearer picture of federal tax rules and a
lot less anxiety about a sudden legislative rug pull.

Case Study 2: The Growing Urban Brokerage

Now picture a fast-growing commercial lines brokerage in a major city. Revenues have climbed sharply, and the
owners are flirting with income levels where the 199A deduction becomes more complex, with phaseouts and wage
limitations kicking in. Before the new package, their biggest worry was that they would scale up just in time
to lose a key deduction altogether.

With permanency in place, they refocus their energy. Working with tax advisors, they redesign compensation so
that W-2 wages and QBI are balanced in a way that preserves as much of the deduction as possible. They also
evaluate whether certain ancillary activities like consulting services or side investments should be housed
in separate entities to keep their main insurance operations squarely within the 199A framework.

The tone in partner meetings changes from “Should we stop hiring until we know what Congress is going to do?”
to “How do we take full advantage of the current rules while still building the team we need?” It’s a subtle
but important shift: tax policy becomes a strategic input, not a looming threat.

Case Study 3: The Solo Producer Turned Entrepreneur

Finally, imagine a solo producer who left a captive carrier and hung out a shingle as a small independent agency
three years ago. At first, taxes felt like a blur: estimated payments, new forms, and a lot of acronyms. The
20% QBI deduction showed up on their return almost like a pleasant surprise, softening the blow of self-employment
tax and health insurance costs.

When headlines started hinting that the deduction could vanish after 2025, this new agency owner quietly shelved
some growth ideas. Did it really make sense to hire a CSR or invest in a new AMS platform if their after-tax
take-home pay was about to shrink?

With the Trump tax package making 199A permanent, that hesitation eases. Now, the owner feels more confident
about reinvesting in the business maybe hiring that CSR, maybe outsourcing marketing, maybe renting a slightly
better office than their old laptop-on-the-kitchen-table setup. The deduction doesn’t guarantee success, but it
gives them a little more breathing room to take smart risks.

Bottom Line: A Big Win, With More Chapters to Come

The Trump tax package and the “One Big Beautiful Bill” deliver something independent insurance agencies have
wanted for years: clarity. By making the 20% Section 199A pass-through deduction and key TCJA provisions
permanent, the law gives agency owners a more stable foundation for planning, investing, and perpetuating their
businesses.

At the same time, the broader policy debate around 199A who benefits, how much it costs, and whether the design
should be simplified or retargeted is far from over. For the Big “I” and its members, the lesson is clear:
stay informed, stay engaged, and treat tax policy not as background noise but as part of the strategic landscape
your agency operates in.

For now, though, independent agents can enjoy at least one simple truth: after years of uncertainty, they finally
know what the rules are and that’s a win worth celebrating, even if you still need a strong cup of coffee to
read the fine print.