Sour Cream Cutout Coookies

1 cup butter or margarine, softened
 1 1/2 cups sugar
 3 eggs
 1 cup sour cream
 2 teaspoons vanilla extract
 3 1/2 cups all-purpose flour
 2 teaspoons baking powder
 1 teaspoon baking soda
 Frosting:
 1/3 cup butter or margarine, softened
 2 cups confectioners' sugar
 2 tablespoons milk
 1 1/2 teaspoons vanilla extract
 1/4 teaspoon salt

In a mixing bowl, cream butter and sugar. Beat in eggs. Add sour cream and vanilla; mix well. Combine flour, baking powder and baking soda; add to the creamed mixture and mix well. Chill dough at least 2 hours or overnight.
 Roll on a heavily floured surface to 1/4-in. thickness. Cut with a 3-in. cutter.
Place on lightly greased baking sheets.
Bake at 350 degrees F for 10-12 minutes or until cookie springs back when lightly touched.
Cool.
Mix all frosting ingredients until smooth; spread over cookies.