2 1/2 year old BAD TEMPER!!

My daughter will be 3 in January. The bad behavior is directed mostly at my wife but all family members get a taste of it now and then. When my wife wakes her up to take her to the sitter when she goes to work my daughter will scream at her "Go away I dont like you Get out of my room" Occassionaly she hits and kicks, but mostly just screaming. When she hits my wife my wife will give her a little tap on her tush and asks if she likes to be hit and my daughter will say yes and ask to have it done again. Time outs arent working since she tells us she would rather stay in timeout than be nice to people or say sorry to mommy. Lately she has been a terror and has my wife in tears. She will tell mommy and the grandparents she doesnt like them go away go back to work. She is actually screaming this at them. Then the next minute she will be all cuddly and then all of a sudden back to the screaming and hitting with no noticeable provocation. She is very bright and advanced verbally for her age.