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1
Whisk together flour and salt in a small bowl.
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2
Beat together butter and sugar in a large bowl with an electric mixer at medium-high speed until pale and fluffy, about 3 minutes in a standing mixer (preferably fitted with paddle attachment) or 6 minutes with a handheld, then beat in egg and vanilla.
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3
Add flour mixture and mix at low speed until just combined.
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4
Form dough into 3 (5-inch) disks and chill, each disk wrapped in plastic wrap, until firm, at least 2 hours.
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5
While dough chills, unwrap candies and separate by color in small heavy-duty sealable plastic bags.
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6
Seal bags, forcing out air, then coarsely crush candies by wrapping each bag in a kitchen towel and pounding bags with a rolling pin.
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7
Preheat oven to 350F.
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8
Roll out 1 piece of dough into a 9-inch round (1/8 inch thick) on a well-floured surface with floured rolling pin (keep remaining dough chilled).
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9
Cut out as many cookies as possible from dough with large cutter and transfer to a Silpat-lined baking sheet, arranging about 1 inch apart.
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10
Cut out centers from cookies with small cutter and add to scraps.
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11
Spoon about 1/2 to 1 teaspoon crushed candy (depending on size of cutout) in center of each cookie.
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12
(If you want to use these cookies as tree ornaments, make a hole with a drinking straw in each for hanging.)
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13
Bake in middle of oven until edges are golden, 10 to 12 minutes, then cool cookies completely on baking sheet on a rack, about 10 minutes.
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14
Transfer with a metal spatula to a plate or an airtight container.
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15
Gather scraps and chill until firm enough to reroll, 10 to 15 minutes.
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16
Make more cookies with remaining dough and scraps (reroll once) in same manner on cooled baking sheet.
