S-Corps work under the general premise that it's just like you, if you were a corporation. So if you don't spend all the income in your business in the year, you owe income tax on what remains. If you have plenty of profits, you write yourself a regular W-2 paycheck. At the end of the year, whatever you don't spend as a legitimate business expense -- even if it's exclusively for business purposes -- is taxed at the same rate as if you had spent the money on whiskey and hookers.
Case in point: there is a huge difference between a high-income wage earner who uses S-Corp status for maximum flexibility and the local beautician or mechanic who does the same thing. Lots of independents who are S-Corps have highly volatile income: if you get a client that writes you a check for 50K in January that might be the last income those guys see for that year. So those guys have to make a difficult business decision as to what to do with the money, and the most logical thing to do is to pay business expenses as needed and withdraw the rest as cash disbursements only as a last result. Writing yourself a W-2 paycheck when you're not sure of future income is basically taking away spending money from the business for no logical reason. As I understand it, the system is designed this way on purpose: tough times allow S-Corps to ride on profits and re-tool for the good times. Good times S-Corps work just like "regular" businesses.
So for small folks with highly-volatile income, being able to move funds around is the only thing sometimes that keeps them afloat. Unfortunately, there are a lot of guys making 400K a year or more who pay themselves a salary of $20K and take the rest as cash disbursements (thereby avoiding paying themselves as W-2 employees mostly altogether)
The reason the tax code is such a mess is that folks get mad at one bunch or another that they think are not acting fairly, so they punish them -- usually punishing many more than the original target. Or politicians want extra votes, so they make an exception for certain people -- usually providing exceptions to hidden interests and creating perverse incentives. 60 years of this and you have a complete disaster.
So yes, by all means make folks pay their share, just be aware that the guy you read about in the paper isn't necessarily the average guy. It's not an "income trick" if it helps the economy grow.