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Tax reform will get done, but more likely in early 2018, policy analyst says

  • Republicans must pass tax reform legislation, but it's not likely to happen in 2017, Strategas' Dan Clifton told CNBC.
  • He thinks the first quarter of 2018 is a more reasonable timeline for tax reform to get enacted.
  • Treasury Secretary Steven Mnuchin told CNBC earlier Thursday the administration has a "very detailed" tax plan that he expects to become law this year.

Republicans have no choice but to pass tax reform legislation, although passage it isn't likely to happen in 2017, policy analyst Dan Clifton told CNBC on Thursday.

Treasury Secretary Steven Mnuchin told CNBC earlier Thursday that the administration has a "very detailed" tax plan that he expects to become law this year.

"They want to get this done before December 31st so taxpayers have certainty on January 1st. But as we've seen over and over again, these timelines continue to slip, and we think the first quarter of 2018 is a more reasonable timeline for tax reform to get enacted," Clifton, head of policy research at Strategas Research Partners, said in an interview with "Closing Bell."

So far, there haven't been many details released about the GOP tax plan. In a speech Wednesday, President Donald Trump touted tax reform as key to unlocking economic growth and said he was fully committed to working with Congress.

Clifton said "a lot of progress" has actually been made between the White House and Congress. And he believes reform will ultimately get done because Republicans want to stay in office.

"If the election was today, they would lose 30 seats in the House," he said. "They need economic growth. We believe that this tax cut is going to get growth higher and it's the only thing that can save their majorities. That's why they will wind up passing something by first quarter of 2018."

He anticipates some sort of hybrid plan, with reform of the international tax code to prevent future corporate inversions, as well as some temporary tax cuts.