Preheat the oven to 350℉ and line a cupcake pan with cupcake liners. Set aside.

In a large mixing bowl, cream together the butter and sugar for 5 minutes until light in color and fluffy using a handheld mixer or stand mixer.

Beat in 1 egg at a time until fully mixed in. Add the vanilla extract and beat until mixed in. Set aside.

In a medium-sized mixing bowl, sift together the flour, baking powder, and salt. Add one-third of the dry ingredients to the wet ingredients on a low speed, alternating between the flour mixture and the milk until incorporated.

Divide the batter evenly into six separate small bowls. Add one color of the food coloring into each of the bowls and mix until the desired intensity of the color is achieved.

Using six spoons, begin spooning the batter into the cupcake-lined pan, starting with purple, followed by blue, green, yellow, orange, and ending with red.

Bake for 20-25 minutes at 350℉, or until a toothpick inserted into the center of a cupcake comes out clean. Transfer the cupcake pan to a wire rack to cool to room temperature when fully baked.

While the cupcakes are cooling, make the frosting. In a stand mixer bowl or large mixing bowl, beat the butter on medium until the color has lightened (about 5 minutes). Add in the powdered sugar, 1 cup at a time, and beat for 1 minute between each addition ending with the final 1/2 cup. Pour in the milk and vanilla and beat for another 2-3 minutes until light and fluffy.

Transfer the frosting to a piping bag with a star tip if desired. Frost the cupcakes using the piping bag or using a spatula. If desired, decorate with sprinkles or rainbow candies.