To ensure the low end-to-end (E2E) delay for tactile internet, short frame structures will be used in 5G systems. As such, transmission errors with finite blocklength channel codes should be considered to guarantee the high reliability requirement. In this paper, we study cross-layer transmission optimization for tactile internet, where both queueing delay and transmission delay are accounted for in the E2E delay, and different packet loss/error probabilities are considered to characterize the reliability. We show that the required transmit power becomes unbounded when the allowed maximal queueing delay is shorter than the channel coherence time. To satisfy quality-of-service requirement with finite transmit power, we introduce a proactive packet dropping mechanism, and optimize a queue state information and channel state information dependent transmission policy. Since the resource and policy for transmission and the packet dropping policy are related to the packet error probability, queueing delay violation probability, and packet dropping probability, we optimize the three probabilities and obtain the policies related to these probabilities. We start from single-user scenario and then extend our framework to the multi-user scenario. Simulation results show that the optimized three probabilities are in the same order of magnitude. Therefore, we have to take into account all these factors when we design systems for tactile internet applications.