No offense, heidi, but you don't want to "scare the crap" out of a puppy. And since the dog is sitting right next to the person while doing this, the pennies in the can thing won't work.
The pawing behavior is natural, and what you want to do is make it unprofitable for the dog. Even when you take his paw and put it on the floor, that is attention and for many dogs, even negative attention is better than none.
Set it up so that he is going to paw you. When you see the paw come, move your arm away or stand up abruptly so that the dog is thrown off balance. The second he has all four feet on the floor, praise and/or offer a treat. The pawing is a demand, and dogs must learn that demands do not work.
Saying "No" isn't the best thing. It's much better to give a command that tells the dog WHAT to do - like "OFF!"