First of all, I feel this is a delicate issue. There are many people who are on each side of this hot debate. It often divides parents and others who view discipline differently for their children.
I know that there will be plenty of times in my future that I wished I had reacted differently to my child's behavior. It may not be spanking but I'm sure there will be times when it's not appropriate or what is in her best interest.
That being said, teaching your children consequences to behavior is difficult but necessary no matter how you look at it. Children need to know the difference between right and wrong and learn that there are consequences to their behavior. The hard part is figuring out the best way (and using it when your most angry!)
There is a difference between spanking out of anger and giving a consequence with a level head. If you are spanking out of anger, the child will be learning (on some level) that it's ok to hit when you're angry. If you take a deep breath and try to calm yourself when you're child does something wrong, you are less likely to regret what you've done. Also, if you do any one method ALL the time (ie. screaming at them, spanking, or timeouts) they will tune you out and maybe try to do those things to get your attention. If you are saying no all the time, what is your yes worth? If children hear "yes" often (ie. "good job!", "yes, you did that right!", "You are doing a great job sharing with your sister!") they will look for attention in positive ways.
Time outs are often effective when you are giving positive reinforcement to something besides them (their sister or something else) and not giving them attention for their negative behavior. Children innately want positive attention.
Many experts believe that spanking is not always wrong. John Rosemond, executive director of the Center for Affirmative Parenting in Gastonia, N.C., and author of several books on discipline, notes that 50 years ago almost all children were spanked. Yet by all accounts, children are more aggressive and prone to violence today, and at earlier ages, than they were back then.
Whatever side you believe to be correct, the most important thing is to talk to your children after disciplining them about why they were disciplined, and then letting them know that you are doing it because you care about them want them to learn good choices.