We don't take away reading (usually that's the last activity--no toys, only reading). We do take away other educational privileges. We hate doing it but it seems to be the only thing that makes an impact.
Taking away books and book time has been one of our most successful consequences. I think you really just have to find what it is that really matters to the kid - the consequence has to mean something. And if the only thing at the moment that he/she cares about is books, by all means, i vote take 'em away. They will learn how to behave if they want to avoid the consequence. (Taking away wii lego games and/or books before bedtime are about the only consequence that work in our house at the moment.)
Cathy A - If I hadn't seen your name on the post, I would have thought my husband wrote it - that's exactly what we do.
However, a friend of mine suggested that we ground her from books as a consequence for DD8 refusing to do her work at school (this was pre-GT identification). I did not like that idea, and thank goodness I didn't do it. It turns out that was the only time during the day she was challenged mentally.
For us, the consequence of not doing work at school is that the kids have to complete it at home. If that takes away from their free-reading time, it's not my fault
Cathy A, We tried that same tactic, but it didn't work at all. She really didn't care about missing fun in the evening - the work was just too boring to her. The teacher tried having her do it at recess too, with a similar result. We tried everything last year! And in hindsight, it's a good thing that she was so stubborn about it; otherwise, we wouldn't have gotten her IQ test done and who knows how bad her behavior would have been by now :-)
I definitely agree with your consequence if it works. Sounds like you use Love and Logic too.