in most cases, i'm not a huge fan of time-out as a form of discipline. it can be a helpful tool in helping everyone calm down a bit, but it doesn't solve any problems or teach self-regulation.
he's at the age where you can start introducing a discipline policy that uses logical consequences. you break it, you try to fix it. you spill it, you clean it. you hurt someone, you find a way to help them feel better. If he tries to say sorry, you can say that sorry didn't help you feel better and he needs to find another way to help you feel better. at first you need to guide him to come up with ways to solve these problems. And use that terminology- say "we have a problem. You decided to ____ and now I feel _____. You need to find a way to (help me feel better/solve this problem/etc...)" As he gets older and better at recognizing feelings, you can change what you say to "We have a problem. You chose to _____. How do you think that made me feel?"
He behaves this way because he is getting the negative attention and he thinks it's funny that it's affecting you. When you say these things, have a firm and steady voice. Be honest. If he made you angry, tell him you feel angry. If you are sad or hurt, tell him (calmly). He needs to learn empathy, but cannot do that until he learns to recognize that his actions have an impact on others. Giving him a chance to correct what he does or solve the problem shows him that there were impacts to his actions. Time-out removes a child from the situation so they don't make the connection between their action and it's effects on others. Instead they're busy sitting there being mad at you for putting them there. Or, in his case, he uses timeout as an occasion to get a big reaction from mom. Therefore, time-out is rarely a deterrant from doing it again.
As for his interactions with the baby, you have to be her voice since she can't express herself. "How do you think she feels? Why does she feel this way? You need to think of a way to help her feel better." I realize all of this can sound ideal, but it actually works well with most typically developing children. It just takes a bit of time and consistency. He will probably seem shocked at first at your dramatically different reaction. You will have to guide him a bit to come up with solutions. A lot of them are easy- if there is a big mess it's obvious that the solution would be to clean it up. As for you being upset, you can be creative. You may decide that him drawing you a special picture will help you feel better. This system is also more of a reflection of society and what he will encounter when he goes to school. There are consequences for poor decisions, and you need to try to solve your problems. You have to recognize how others feel. This method helps build internal controls instead of relying on the external controls such as threats of time-out.
Good luck. If you have any examples of a specific situation, i may be able to give you an example of what can be said/done. Like i said, this has worked with almost every typically developing child in my classes in the past 8 years.
I was having the same problems with my son. He is 3 and half. The time out don't really work. That's the way I feel. So if he refuses to eat, which is the problem, then I just take away the thing he likes most, which is the TV. and so on. You could try this. Also, I find that if I ignore him after I have told him what he did wrong or if he's not listening. My son would do the same they-not sit, run around laugh. The thing to do is tell him what he needs to do maybe 2 or three times, then ignore him and just walk away. What is happening is that he's getting so much attentin from you-bad or good and he dosn't know what's goin on. Because believe me I went through what you are and it just didn't work. Once I took away and ignore tantruming behaviors you get better results. You have to ignore bad behaviors and reinfore the good ones. And I think as parents we forget to do that. So I'm trying really hard to reinforce all the good things he does during the day instead of the bad ones. Just pay little attention to it, but remind him that we don't do and act like that. Children need to know that is not appropriate behavior. And believe me they now and understand more than we think Also, I have a 14 month old girl as well. Hope it all works out. HAPPY HOLIDAYS!!!!!!!!!!!!