Jonathan Landon (LL.M. (Tax) 2011, Florida) has posted Taxation of Human Capital: Analyzing Tax Discrimination on Educational Expenditures on SSRN. Here is the abstract:

Scholars have long thought that the tax code’s disallowance of cost recovery for human capital expenditures results in discrimination of human capital as compared to physical capital. This paper examines this long held assertion and concludes that it is not correct. In fact, this paper concludes that the tax code actually subsidizes many human capital expenditures. Using as a baseline, a simple theoretical tax system that allows human capital and physical capital the same basic cost recovery mechanism, the empirical portion of this paper compares the tax benefits in present value terms of human capital under the current Code and under the “fair” baseline tax system. The results show that the extent that the Code discriminates against the acquisition of human capital, if at all, depends on how much taxpayers spend on education, how the education if financed, and the taxpayer’s income level. Importantly, this paper identifies that there are many situations where the current Code’s treatment of education is more favorable to taxpayers than under a system would treats human capital and physical capital the same.