My oldest son (7) wrote graffiti on his bedroom wall once (about 3 months ago, actually), and this was the punishment he received:
1) On the day he did his "graffiti" he got a 2 hour lecture on everything there is to know about graffiti, vandalism, jail times for vandalism, the effect of how jail time would look on a background check if you applied to a job, just EVERYTHING there is to know about how graffiti can potentially ruin your life.
2) He had to write a 4 page essay on what my husband and I discussed in our lecture, to prove that he truly listened and learned his lesson.
3) Grounded from all toys, games, TVs, electronics, EVERYTHING! In short, the only thing he was allowed to do was wake up, take a shower, go to the restroom, go to school, come home from school, do his homework, sit in his room and do NOTHING except write his essay (he had 3 weeks to complete it), eat dinner, and go to bed (not necessarily in that order) for 3 weeks straight.
4) A toothbrush, a bucket filled with water and soap, and a rag. He had to scrub every last trace of marker from his wall, and once I approved that it was clean, his dad handed him a paint brush and can of paint and made him repaint where he graffitied anyways.
5) The threat that if he EVER made so much as a pen mark on his wall, the same punishment would happen X2 (6 weeks grounding, 8 page essay)
He hasn't gotten in trouble since.
A/N: He IS allowed to paint and draw on paper, canvas, and other APPROPRIATE places. If he ever wanted to make a "graffiti mural" and had the permission of the owner of whatever establishment, then I would be 100% supportive of him. I ENCOURAGE art and creativity. Its a wonderful way to express yourself. However, graffiti in the form of vandalism is WRONG.