Well, you have discussed her behavior, but not necessarily any info in order to actually act with. Does she only act this way to her brother or is it just greater here, but exists other places. If it existed here and to some degree in other circumstances, i would suggest a good hard look at her ability to cope and manage stress (I would also say health is an issue, diet should be looked at, herbal yeast control needed etc).
If it is only happening with her brother (and not really to any degree outside that) I would recommend a play therapist certified and one that has a playroom as an office, not a talk therapist "for children". All children can benefit from this and parents would be amazed at what they can learn. Stanley greenspan uses floortime therapy for severe development conditions, but play therapy is fabulous at getting to the root of what is going on with a child.
If therapy is not an option. get on the floor iwth your daughter and play with her. Make a character do somehting to her charater (as she allows you in) that he may do to her ad see what she says to your character. Hit her character or allow hers to hit yours. Then ask her "I am not sure what he/she should do, do you know?". Ask questions and make statements and see how she responds. Remember, this should be done slowly. Kids are smart and will figure out if you are just pumping them. Get in there with her and play, learn, and discover.
i have no trouble with a good disciplineary action including spanking, but if there may be something that she isnot capable of dealing with, you will only isolate her with consequential behavior. One way to find out is to disipline with consequences consistently. If after 2-3 weeks of consistency, nothing changes, you know you have more to discover. Discipline won't develop skills, it will only change behavior that is capable of changing.
good luck, J.