How do you deal with clients with bad taste?

depends on what their bad taste is about.

if they have a flat-up tacky idea, i'll probably just turn the project down. i know i won't want to do it, i'll push off working on it whenever i have something else to do, and eventually i'll fall behind and drop it anyways, might as well keep a good rep.

if they want some tacky/dated art direction that i personally disagree with, i'll do what i can to talk them out of it. if it'll look dated, i'll explain why, if i just don't like the style i'll explain why - usually it'll be because i get a disconnect from the stylistic attributes and the brand's actual message. in this case, i'm with village genius: do it, compromise on the design enough to get the job done, then file it under "paid the bills".