Dow Jones & Company Inc.'s (NYSE: DJ) Wall Street Journal (A.K.A, The Towel) occupies a unique spot in the media firmament. As I pointed out earlier in the year, it changed its footprint and now looks to me like a Holiday Inn bath towel. Towel Talk offers a perspective on its news and views.

This morning's Wall Street Journal [subscription required] previewed President Bush's State of the Union (SOTU) speech with the kind of "objective reporting" that makes me want to go back to the dictionary to look up "objective."

While Newsweek reports that Karl Rove is betting his colleagues $5 that President Bush will not raise taxes in his final two years in office, if the Towel is to be believed, Bush is planning to propose a tax increase in his SOTU tomorrow evening.

How so? Currently individuals who receive health insurance through their employers do not pay tax on the value of the health insurance benefit. And those who buy health insurance themselves do not get tax breaks on their premiums.

But under Bush's SOTU proposal, the Towel reports, families receiving health insurance through their employers would be required to count the benefits as income. For a family receiving $12,000 in annual health insurance benefits, this could amount to an effective tax increase of $3,360 for a family with a 28% tax rate.

But the Towel uses a tiny subset of the results of its latest poll not to highlight the President's Nixonian level of unpopularity (33% approve of him and two-thirds of Americans have given up on his presidency), but to show that he is responding to an issue that its poll says people care about. And while it touts the administration's estimates of how much the plan will save some families, the Towel neglects to estimate the magnitude of the tax increase.

If Karl Rove is going to keep from losing a lot of $5 bets, he'll need better control over the Towels' reporting.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He subscribes to the Wall Street Journal but doesn't have any financial interest in Dow Jones securities