You definitely need to take control of him and not shy away for fear of his response, while you do that he's getting away with it all and has no reason to stop and is probably fully aware that you won't confront his behaviour.

I would think your best option is run through rules and consequences with him so he knows where he stands and then carry them out as and when nessacary, try to go for things that you can carry out and still remain calm, they have far more effect than dramatic ones that are thought up on the spur of the moment, ...though of course we all get caught on the hop. If you find yourself presented with a situtation you aren't prepared for, theres no harm in leaving consquences until later when you've had time to consider the best plan of action.