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Trump campaign fights back against tax policy analysis

Donald Trump's campaign shot back Tuesday against a recent report that said the Republican nominee's tax plan would help the economy in the short term but Hillary Clinton's would be better in the long term.

"Trump wants to cut taxes, reduce regulation, unleash the energy sector, eliminate our trade deficit by increasing exports, reducing imports. Everything about that pushes towards growth," Trump senior policy advisor Peter Navarro told CNBC's "Closing Bell."

A new analysis from the Wharton School's Penn Wharton Budget Model found Trump's tax plan would initially boost job creation and gross domestic product, but both swung in the other direction by 2027. Meanwhile, it found that Hillary Clinton's tax plan would initially result in job loss and a lowering of the GDP, but those would be positive by 2027.

Donald Trump
Mike Segar | Reuters
Donald Trump

Wharton professor Kent Smetters, faculty director of the Penn Wharton Budget Model, told "Closing Bell" on Monday the report makes a "crucial link" that others have missed.

"Our model takes the additional deficits that are created by any plan into account," Smetters said.

"In particular if the economy is an open economy, similar to the United States today, and we have capital flows that we've seen historically, then as the government produces new debt, that debt competes with private capital for household savings as well as international capital flows."

Navarro pointed out that Wharton and other think tanks are only looking at tax plans.

"That skews against Republicans because of course [with] tax cuts, you get tax reductions," he said. "When you include the positive offsets from energy, regulation and trade, it's revenue neutral and you get twice as much growth as Clinton, millions more jobs."

Smetters responded in a statement to CNBC on Tuesday saying that the budget model provides nonpartisan, research-based analysis that helps people understand various economic policies.

"Penn Wharton's tax, immigration and Social Security simulators provide access to fact-based information that allows people to decide for themselves what initiatives are best for the country's future," he said.

Both Wharton's report and Navarro's arguments are predicated on the theory that the proposals will be passed by Congress and become law.

However, Navarro is confident that Trump will be able to work with lawmakers.

"Trump is the art of the deal. If anybody can sit in a bipartisan basis and push things through, it's going to be Donald Trump," he said.