S.N.
I think most kids go through this, in some form, around five years of age. I agree that having him earn his own money is a good idea. I would also make him return whatever he takes, by himself, and apologize. Make sure to point out to him that stealing is a crime. And kids can get in trouble with the police for crime, too. Long term loss of priviledges does not really work on this age group, in my experience. They really can't get disciplined in any way that lasts longer than about 5 minutes, because they start to forget why they are being punished.