Is double taxation “fair” to corporations and shareholders?

Is there any reasonable action which the governments of Canada or the USA could take to convince corporations to deploy their cash assets back into productive activities in our economies?

• In the USA, corporations are holding $1.5 trillions, or about 12% of GDP, as cash-on-hand, and are still now re-directing about 10% of their profits, about $25 billions from 2008 to 2012, into cash holdings. These figures ignore those corporation's foreign cash holdings, which are likely impossible to attract back home due to the high US corporate tax rate (35% in US compared to 15% in Canada). "U.S. firms are actually redirecting a substantial portion of domestic profits to their foreign operations, not the other way around" -- http://2Fmedia.rbcgam.com  Canadian corporations are proportionately worse, holding $600 billions in cash, approximately 33% of Canada's GDP. It seems like a vicious circle. The more uncertain corporations are, the less likely they are to deploy their cash reserves even though the reserves are not really required to ensure survival through any likely further economic downturn, so the reserves grow larger. Could a system be implemented which would be fair to the shareholders of those companies, yet still ensure a significant proportion of that capital reserve gets deployed into the economy? Perhaps a requirement that corporations must return excess cash to shareholders in a timely fashion rather than holding onto huge piles of it?  A formula calculation based on anticipated economic risk by industry, plus a factor for other issues. Such a system might reduce corporation's ability to take over other business a bit, though most of that activity uses the buyer's shares plus cash reserves from the target anyway.

• Answer:

  Yes, have a tax on Cash and near-cash assets that are held by corporations. (no one will like this though)