Beat the chilled butter and sugar together on medium-high speed until the mixture turns pale and fluffy, about 3 minutes. This step traps air into the dough, which helps the cookies bake evenly. Don't skip scraping down the bowl halfway through — unmixed butter chunks lead to uneven dough.
Mix in the egg, egg yolk, and vanilla extract until fully combined. Scrape the sides of the bowl again to make sure nothing is hiding at the bottom. The mixture should look smooth, glossy, and slightly thickened at this point.
Add the flour, salt, and baking powder on low speed, mixing just until the dough comes together. Overmixing here activates the gluten and makes cookies tough instead of tender. Stop as soon as you no longer see streaks of flour.
Shape the dough into a flat disc, wrap it tightly, and refrigerate for at least 1 hour. Chilling firms up the butter so your cutout shapes stay sharp in the oven. If you're short on time, the freezer can speed this up in about 30 minutes.
On a lightly floured surface, roll the dough to about ¼-inch thickness. Use your Halloween cookie cutters to cut out ghosts, pumpkins, bats, or witch hats. Re-roll the scraps once, since dough handled too many times gets tough.
Arrange the cutouts on a parchment-lined baking sheet, spaced about 2 inches apart. Bake at 325°F for 12 to 15 minutes, until the edges just barely turn golden. Let them cool completely on the pan before moving to a wire rack.
Whisk the meringue powder and powdered sugar together, then slowly add water and vanilla while mixing. Beat on medium-high speed until stiff, glossy peaks form, about 5 minutes. Divide the icing into bowls and tint each one with gel food coloring.
Use thicker icing in a piping bag to outline each cookie's edges first. Thin the remaining icing slightly and use it to flood the center, letting it settle into a smooth layer. Use a toothpick to pop any air bubbles before the icing sets.
Once the base icing has set for about 30 minutes, pipe on details like eyes, stripes, or stitching with a small round tip. Let the finished cookies dry uncovered for at least 4-6 hours, or overnight for the cleanest results. Patience here really does pay off.