A story in yesterday’s Wall Street Journal , “Cost of Business Tax Cuts Underestimated,” argues that the revenue estimates of the business tax cuts included in the tax stimulus bill are low-balled because the tax relief is spread over a number of years and so the time value of money would raise the true deficit cost. The article has three big holes.

The piece erred first because government must finance not only the business tax cuts, but the rebate checks as well. There’s no reason to focus on the mote of business tax relief while ignoring the plank of tax relief for individuals. So as long as we’re calculating the all-in costs of the stimulus, a balanced analysis would show the interest expense accruing in each year from the deficit financing of the whole package, not just the business tax cuts.

The more damning feature of the piece is that it failed to mention that the scoring of the stimulus package was done in the usual fashion — there was nothing new, sinister, or inappropriate here. Nor did WSJ bother to point out that the interest costs from increased spending bills are similarly excluded from the official scoring. Why did WSJ focus only on the business tax relief in this bill? Will there be a similar story when, for example, the SCHIP or farm bills are up for debate? Not likely.

Finally, the story notes the stimulus would “theoretically” lead to additional business investment thus stimulating the economy. But given the focus of the story on deficits, a balanced reporting would have also mentioned the resulting revenue feedback from a stronger economy, which could at least “theoretically” exceed the interest costs of the business stimulus.