In a large bowl, cream together the softened butter and granulated sugar until light and fluffy.

Beat in the eggs one at a time, then stir in the vanilla extract.

In a separate bowl, whisk together the flour, baking powder, and salt.

Gradually add the dry ingredients to the wet ingredients, mixing until just combined.

Divide the dough into portions, color each portion with a different food coloring, and wrap in plastic wrap. Chill for at least 30 minutes.

Preheat oven to 350°F (175°C). Line baking sheets with parchment paper.

Roll out each colored dough portion thinly on a floured surface. Layer and swirl the colors together to create a tie-dye effect. Cut out desired shapes using cookie cutters.

Place cookies on the prepared baking sheets and bake for 8-10 minutes, or until edges are lightly golden.

Let cookies cool on the baking sheets for a few minutes before transferring them to a wire rack to cool completely.

In a large bowl, whisk together the powdered sugar and meringue powder.

Gradually add the water, mixing until you have a smooth, thick icing consistency. If too thick, add a few drops of water; if too thin, add more powdered sugar.

Divide the icing into smaller bowls and tint each with a different food coloring.

Once cookies are completely cool, drizzle or spread the colored icing over them in a tie-dye pattern. You can use toothpicks to swirl the colors further.

Let the icing dry completely before storing.