Cream butter and sugar in a large bowl until light and fluffy.
Beat in eggs and vanilla.
Combine flour, baking powder, baking soda and salt. Add to creamed mixture alternately with milk.
Cover and refrigerate 15-30 minutes or until the dough is easy to handle. Preheat oven to 350°.
Roll out dough to 1/8-inch thickness on a floured surface. Brush rolling pin with flour if dough sticks to it. Use cookie cutters to cut out shapes.
Place cookies 2 inches apart on baking sheets lined with parchment paper. Sprinkle with sugar, if desired.
Bake 6-7 minutes or until edges are just starting to turn very light brown. Remove from baking sheet and cool on wire racks.