Cream butter, suagar, vanilla. Add egg and beat well.
Stir in sifted dry ingredients. Stir well and form into disk.
Chill for at least 1 hour.
Roll out dough 1/4 to 1/2 inches thick and cut out in favorite shapes.
Place on parchment paper lined baking sheet.
Bake for 8 - 10 minutes at 375 degrees.
Transfer on rack until cool.
Combine cream chees, butter, powdered sugar, milk and extract and mix well until very smooth. Adjust to desired consistency with additional milk or powdered sugar. Tint to desired shades. Store in tighly covered containers.