Ok, this is really simple. You call the law. Any dog that shows aggression while you are on your property that dog needs to be taken care of. No question about it. That is a dangerous animal period. Nothing more needs to be said. Make it simple....... since you have done nothing yet at least get the dog on film.... ok, film isn't used anymore so video the dog, take a picture, carry a paintball gun, set a trap....... Hell, do all of it. Their would be NO WAY that dog would be allowed around my house.
Make it simple...... It's a DOG. An aggressive DOG. Forget about the drama of the owner you have rights and your right is to be able to walk out of your house and know everything is fine. NOT look over your shoulder to make sure a dangerous dog is lurking near by. Just wrong. I would have no problem talking to the owner. He sounds like a creep anyway. Get the law over to his house and tell him "YES..... I saw this dog kill my chickens and it was aggressive towards me. " If they ask why didn't you do anything before just explain you didn't want any problems but now it's gone to far. I'm sure your neighbors will back you up.