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In a large bowl, beat butter with an electric mixer on medium to high speed for 30 seconds. Add sugar, baking powder and salt. Beat until combined, scraping bowl occasionally. Beat in egg, milk and vanilla until combined. Beat in as much of the flour as you can with the mixer. Stir in any remaining flour. Divide dough in half. Cover and chill for about 2 hours or until dough is easy to handle.
Preheat oven to 375°F. On a lightly floured surface, roll half the dough at a time to 1/4 inch thickness. Using 2-1/2-inch cookie cutters, cut dough into desired shapes. Place cutouts 1 inch apart on an ungreased baking sheet.
Bake for 7 to 10 minutes or until edges are very lightly browned. Transfer to a wire rack; cool completely.If desired, frost and decorate cookies.