Aliel, this is obviously very painful for you and for your son, but I think you might be over-reacting to the situation.
From what you've written above, these are some of the assumptions you seem to be making, which I think may not be justified:
That your 5-year-old son's perception that his teacher is victimising him means that the teacher actually is victimising him, that she really is "excessively cruel and degrading towards him".
That the teacher is a nasty, vindictive person who hates you and enjoys upsetting your son.
That the school's only reason for wanting your son to be on the Special Education program is to get the additional funding that comes with that, i.e. that the school administration's sole concern is its budget, and that they're not interested in your son's wellbeing or his educational needs.
Sure, there are some bad teachers out there, but they're really in a minority. Most teachers are not "faulty, cruel" people.
One thing that happens with 5-year-olds just starting off at school is that they find the structures and strictures of school life quite difficult. This is totally normal.
So when he tells you what's been going on at school, it's worth remembering that he's not really capable of giving you a fair summary of how his day went - as an adult might see it - because he's too young. He's telling you how things felt to him, and his feelings are very important and very valid, but just because he feels that his teacher is a cruel person who victimises him doesn't mean that she actually is.
Does she really "not allow him to play with other kids"? At any time? If one of my kids told me this then I'd suspect they'd had a brief incident where they'd been told to do something else rather than playing - e.g. to sit quietly and listen to a story, to do some tidying-up, to go to a different room or to get ready for an activity - rather than thinking that the child was literally not allowed to play with any other children at any time.
She "misleads him in ways which cause him to come home to me crying and in distress". It's not unusual for something that an adult says to make a child upset, but that does not necessarily mean that the adult is singling out the child - treating them differently from other children - or that the adult is doing it on purpose. It sounds as though she could certainly be more sensitive to his feelings, but that's not at all the same thing as acting vindictively to intentionally upset him because she hates you or him. She may not have noticed that he is upset: sharing the teacher's attention with the other children in the class is one of the most difficult things for 5-year-olds to learn. Her attention isn't solely focussed on your child - try not to take it personally. Equally, if a child misunderstands an adult then that doesn't usually mean that the adult has intentionally misled the child out of pure vindictiveness. Sometimes children (and adults) simply misunderstand.
His academic work isn't neat because "the teacher tells him he has to hurry or ... other students are bothering him" - I'm afraid that's part of learning to be in a classroom environment. He's not always going to have all the time he needs to complete his work. Hopefully he can come back to it later, or get some more time in some other way, but it's not reasonable to expect the teacher to put the other 29 children in the class 'on pause' and delay the next activity until your son is ready. Similarly, a classroom is often a noisy, distracting environment. This is something that I had trouble with when I was a kid, and now my daughter finds it a bit difficult too. But it's not (necessarily) a sign of your son being treated any worse than any other child in the classroom.
"She forces my child to participate in activities that require a permission form that I did not approve." This one is less subjective than the others, and should be pretty easy to check on. I'd suggest asking the teacher - or the head teacher (the principal) about this.
So, clearly you need to have a talk with your son's teacher, and/or with the school principal, in person.
It's clear that you're very angry about the way that you think your son has been treated, but if you approach the meeting with the attitude that the teacher is a cruel, nasty person, then I'm afraid you're not going to get very far.
I know it's easy to empathise so strongly with our children that we see the world from their point-of-view, but this is a time when you need to respond as an adult - assertively, rather than aggressively, and starting with the presumption that the teachers are caring educational professionals rather than nasty sadists.
I'd suggest that you do the following:
1) Go into the school office and ask to book an appointment with the principal, of at least half an hour. Explain that you have a concern about your son which is so serious that you are considering withdrawing him from this school and perhaps from the school system entirely.
2) For the appointment, if you have a partner then try to find someone else to do childcare so that you can take your partner into school for the appointment with you. If you don't have a partner then I'd suggest bringing your mum or a close friend with you. It can really help to feel that you've got someone you trust there next to you for moral support. It can also help you to discuss the problem with them before and after the meeting and get their perspective on what the principal says.
3) In advance of the meeting, make a list of the things you're concerned about - excessive criticism of your son making him upset, too many points deducted on his work, him not being given enough time to finish his work, him being generally very upset and unhappy with the classroom environment, him seeing his teacher as a cruel monster, the teacher not giving him a fair share of her attention, him not being allowed to play with the other children, him not having any friends. Photocopy this list so that you can give copies of it to the principal and anyone else in the meeting. This will help you to make sure you cover everything clearly and don't miss anything out.
4) Try to be clear about what you want. For example, it seems like you (rightly, in my opinion) want your son to get speech therapy through the Special Ed programme. If this is the case, then it makes no sense at all for you to withdraw him from the Special Ed programme! That isn't a way to get the thing that you want - although it sounds as though you want to punish the school by reducing their funding, it's actually counter-productive in getting the speech therapy your son needs.
I suggest making another written list of what you want or of what you think good solutions might be, before the meeting. Some of the things you could choose to ask for:
your son to be reinstated on the Special Ed programme and speech therapy sessions to begin within a maximum of x weeks.
your son to be transferred to a different class with a different teacher (if there is another class at the same grade level).
your son to be allowed extra time to finish his work.
your son to be provided with a less noisy/distracting/bothersome environment for doing his work, at least some of the time.
teaching staff to ensure that they don't skip over him in class in spite of his speech difficulty, and allow him the time he needs to respond to questions.
a dedicated support worker to be with him in the classroom, at least some of the time.
for him to get support in learning social skills and making friends. If it's true that he's not allowed to play with the other children (which frankly sounds unlikely) then obviously that restriction needs to end.
You won't necessarily get all the things you ask for, but it's helpful to go into the meeting with an attitude of "my son's educational experience really needs improving and here are some things that I think might help, what do you think?" rather than "you teachers are nasty sadists who hate me and my son, I hate you right back and I want to tell you what terrible people and awful teachers you are" - that latter attitude is how your post above reads.
It's important you make a proper appointment to say all this - don't try to fit it in when you pick your son up and drop him off at school. That's a time when teachers are usually very busy dealing with the whole class, and they're not going to be able to give you the time you need.
The article below seems quite relevant to me, and might be helpful, I recommend you read all of it:
Sometimes kids will make generic claims, like "The teacher's mean to me." You want to find out what that means. Etheredge calls this "unpacking" what your child is saying. Try to get as much detail as possible. Ask, "What exactly did she say? What was happening in the class when she said it?" (You might want to inquire casually, so your child doesn't clam up or exaggerate.) "Mean" might mean "She makes me do my work," in which case you could explain that the teacher is trying to show the kind of behavior you need to have at school; after all, some things are very reasonable under the circumstances, but they may not seem that way to a 6-year-old. The idea is not so much to uncover "the truth" of what went down but to get a more concrete sense of what your child is seeing.
If you decide you need to speak with the teacher, set up a time (not at dropoff or pickup), and go in as someone seeking help in solving a problem. Using inclusive language is important, says Etheredge. Say something like "I'm coming to you with a problem I don't completely understand, but I'm hoping together we can best figure out Mark's concern." Here's where you explain what your child told you and when, using his words as often as possible. "This de-escalates the situation," says Etheredge. You're not saying "Mark says you do this." Instead, you're saying "I need help understanding what's bugging Mark." Whatever you do, assume innocence all around.
speak to the principal or whoever is next on the school foodchain. Tell the principal the steps you've already taken, and "keep bringing it back to the child's perceptions," says Etheredge. "Your attitude is still, we all want her to have the best year possible." Explain how you've tried waiting and discussing it with the teacher, but what's going on is interfering with your child's education.
5 Smart Ways to Handle Teacher Troubles, parenting.com