Cream the butter and sugar in a mixer fitted with a paddle attachment (or using a hand mixer) until smooth. With the mixer running at low speed, add the remaining ingredients (except the colored sugars) and mix until smooth. Form the dough into 2 disks, wrap them separately in plastic, and chill for at least 1 hour. The recipe can be made up to this point and kept refrigerated for up to 2 days.
When you're ready to bake, heat the oven to 350 degrees F.
On a lightly floured surface, roll out 1 disk of dough to a little less than 1/4 inch thick.
Using a thimble, and dipping it in flour often to keep the cookies from sticking, cut out tiny rounds of dough. Carefully transfer to cookie sheets. Reroll the scraps once and cut out more cookies, then discard the scraps (they will become tough if you keep rerolling them).
Sprinkle the tops with plain or colored sugars, then press the sugar lightly into the cookie with your thumbs. Bake until light golden brown, 8 to 10 minutes.
Repeat with the remaining cookie dough. Let the cookies cool on wire racks and store them in an airtight container for up to 1 week.
Recipe courtesy of Gale Gand, Gale Gand's Just A Bite by Gale Gand and Julia Moskin: Clarkson N. Potter Publishers, 2001
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