Cream together your softened butter and granulated sugar until the mixture looks pale and fluffy. This takes about 3 minutes with an electric mixer on medium speed. Don't rush this step—it's what makes these 4th july sugar cookies homemade actually tender.
Beat in your 2 eggs one at a time, then add the vanilla bean paste and mix until everything's combined. Pour in the milk and stir gently until you see no white streaks. The batter should look smooth and slightly thick.
In a separate bowl, whisk together your flour, baking powder, and salt. Slowly add this dry mixture to your wet ingredients, stirring by hand until just combined. Don't overmix or your cookies will get tough—I learned this the hard way when I made them dense last summer.
Pour the batter into a greased 9x13-inch baking pan and spread it evenly to the edges. Sprinkle the red and blue sanding sugar over the top in whatever patriotic pattern you want. For a quick flag design, just do stripes—no complicated decorating needed.
Bake at 375°F for 12 minutes until the edges turn golden but the center still jiggles slightly when you shake the pan. The cookies keep cooking a little after you pull them out, so don't wait for them to look fully set.
Cool in the pan for 10 minutes, then turn the whole thing out onto a wire rack to cool completely. Once cooled, cut into 24 squares using a sharp knife dipped in warm water between cuts. This prevents the sanding sugar from crumbling off.
Dust with powdered sugar right before serving if you want extra sweetness, or skip it if the sanding sugar is enough. Store in an airtight container and they'll stay fresh for up to 5 days.