"you called names"

Right now Levi is real big into letting us know if he hears someone say something "naughty". Yet at the same time he himself is real quick to say something "naughty" to someone (his brothers) if they make him mad. When I say "naughty" some of the words are...Poop, Meanie, Dumb, Butt, etc.. Nothing too major, yet words we are trying to discourage Levi from saying. When Levi does say one of those "naughty" words to someone we tell him he can't call people names. So now whenever he hears someone say a "naughty" word he says, "you called names".

Yesterday Ethan, Levi, and I are in the grocery store. I don't even remember how it all exactly happened, however I said something like this to Ethan..."but we are going to get this one instead..." Right away Levi starts saying "you called names...you called names". So I say I did not and he says..."you said butt!"

Lovely. Yes, how do you even begin to explain the differences between but and butt to an almost 3 year old? Meanwhile Ethan is just laughing and giggling away!! :)