I think it is more than likely that your cat is just asserting the correct pecking order for the household. As she presumably was there first she sees herself as the alpha animal, the lead animal in the household, and is telling the dog to back off. As she is so big next to the cat it's just a warning - it's possible the cat may feel threatened by her size.
Does the other cat win any of the fights? Most cats love a rough and tumble so maybe he retaliates because he likes a scrap anyway?
I'm not sure that your hitting the cat with a paper will be productive and may end up making things worse. The dog can look after herself ... she'll just end up avoiding the cat ... which is what the cat wants.