I call my 7 year-old daughter a "bitch" to her face, but while we are play fighting and in a sarcastic manner only, never in anger. It usually elicits a slap or similar insult from her. In our household, sarcastic insults are the norm (both from and to my kids and me--usually if my wife is swearing, she's actually mad) and swearing is not punished (though discouraged if excessive and gratuitous). It relates to my teaching them to not let words hurt you. If you allow yourself to be offended or affected by words, you give the person saying those words power over you that they don't deserve. If your dad flips you off and calls you a name as a way of showing affection, my theory is that you will be less offended and be able to laugh off a similar offense from someone else. And this hasn't made my 5 kids into little shits. They are all top students and are well liked by their teachers, friends, and friends' parents. There is a lot of fun and love in my house.