In a large bowl, with an electric mixer, cream butter and sugar. Add eggs and continue to cream for 5 minutes. Add vanilla. Stir in flour and baking powder. Knead for 10 minutes by hand.
Preheat oven to 350ºF.
Divide dough into 2 parts. Roll out the first section of dough into a ¼” rope. Cut dough rope into 2” pieces, and twist into a knot shape. Place the little knots 1” apart on an ungreased cookie sheets and bake for 8-10 minutes, Cookies should only be slightly browned on bottom. Watch cookies carefully. Repeat with rest of dough. Let cookies cool before dipping into the thick anise icing.
Icing: Combine sugar and milk. Add anise extract. If to icing is to thin add extra sugar, if to thick add extra milk. Dip tops of warm cookies into icing and set on sheets of waxed paper or a wire rack to set.