The Republican plan for a major tax overhaul may not be fully priced into the market, closely followed trader Art Cashin told CNBC on Thursday.

Stocks opened higher Thursday, a day after news broke that House and Senate negotiators have reached a deal on a tax plan. The two chambers hope to send legislation to President Donald Trump's desk before Christmas. It will likely feature a 21 percent corporate rate.

"No, I don't think it's fully priced in," Cashin, UBS' director of floor operations at the New York Stock Exchange, said on "Squawk on the Street" about the tax plan. "And there are other potentially disruptive things. This pass-through for independent operators may heavily impact the brokerage business."

Cashin said he was also confused about the market's reaction to the tax bill Thursday considering Republican Sen. John McCain has been hospitalized. McCain's office said Wednesday that the Arizona senator was receiving treatment for "normal side effects of his ongoing cancer therapy."

The statement added, McCain "looks forward to returning to work as soon as possible."

"If he's not there for the vote, that's going to make things even tighter," Cashin said.