Okay, I have a sibling like that.
KNOW... that having a sibling like that... is very detrimental to the younger sibling. It is, TOXIC.
My older sibling, actually told me when we were grown-ups, that she hated me and resented me and was always jealous of me and wished I was not around. THAT... is really, toxic, of her.
Growing up with a sibling like that, was VERY OPPRESSIVE. Sure, my parents tried things to discipline her. But well, she still acted like that to me.
It was her personality, coupled with a bad attitude and sense of entitlement.
As a grown up, she even got therapy for herself, to improve. Thankfully. Well so now, she is better. But, I still do NOT, trust, her.
So... my advice to you is, get counseling for your Eldest if you have to.
Because... this is really dysfunctional... if it is allowed to go on... and it will.... dismantle any kind of normalcy for your younger child.... and for your ENTIRE family.
It will... as time goes on and your 8 year old gets older... it will, cause conflicts in your Family.
It did to ours.
Being BULLIED, everyday, by an elder sibling, SUCKS.
It is, awful.
Your Eldest child, has to learn, about coping and POSITIVE ways of doing so.
She CANNOT... just in a TOXIC BULLY manner... take out her hang-ups, on the younger sibling.
I, hated my elder sibling.
We get along now.
But it took until, adulthood... for that to happen.
YEARS. And at one point, I just cut her out of my life.
She was just TOO Toxic.
You need to think HARD... about the repercussions, of what your Eldest child is doing, to the younger sibling.... and how it is really, harmful to the younger sibling.
Your punishments/discipline on your Eldest child, is NOT working.
It is NOT working.
I suggest, child Therapy for her.
You cannot change your eldest child's 'attitude' by punishments. Because, your older child... will still feel resentment toward your younger child, no matter what... even despite punishments.
My Elder sibling, got TONS of attention from my parents, and they treated her just fine.
But that sibling of mine, was just still... very Bullying. To me.
And, for NO GOOD reason.
I used to think my elder sibling was just a monster.
To this day, even if we get along now, better... I do not trust her.
She'd even attack my Husband and resent him... because then once I got married, she got JEALOUS of my Husband... since she NO longer, had 'my' attention.
Do you see, how TOXIC this vicious cycle is????
The ramifications, of it????
And yes, my elder sibling, did this to friends too. So she had friendship problems, too.
GET child Therapy for your eldest child.
You gotta nip this in the bud.
All I know is what I went through with a sibling like that.
So just conveying my story of it.
As we got older, my Elder sibling, just treated my like a "Dumpster" for her problems. It was, very, very, oppressive.
Do something about it now. Because, it is NOT healthy nor fair... to the younger child.
Do not be an enabler, for your Elder child's behavior.
This type of thing, is not always, outgrown.
It does not matter, that your younger child is 'sensitive.' BECAUSE, the Elder sibling, is just mean... and even said she wishes she didn't have a little sister.
Your Elder child, is taking out her hang-ups... on the younger sibling.
This cannot, go on.