Preheat the Oven:
Preheat your oven to 350°F (175°C). Line a 12-cup muffin tin with cupcake liners.

Make the Cupcake Batter:
In a large mixing bowl, beat together the softened butter and cream cheese until smooth and creamy. Add the granulated sugar and continue to beat until light and fluffy, about 3-4 minutes. Add the eggs, one at a time, beating well after each addition. Stir in the vanilla extract.

Combine the Dry Ingredients:
In a separate bowl, whisk together the flour, baking powder, and salt.

Add the Dry Ingredients and Milk:
Gradually add the dry ingredients to the wet ingredients, alternating with the milk. Start and end with the dry ingredients, mixing just until combined.

Fill the Cupcake Liners:
Divide the cupcake batter evenly among the 12 cupcake liners, filling each about 2/3 full.

Bake the Cupcakes:
Bake for 18-22 minutes, or until a toothpick inserted into the center of a cupcake comes out clean. Remove from the oven and allow the cupcakes to cool in the tin for 5 minutes, then transfer to a wire rack to cool completely.

Make the Salted Caramel Frosting:
In a medium saucepan, melt the butter over medium heat. Add the brown sugar and bring to a simmer, stirring constantly. Let it simmer for 2-3 minutes, then stir in the heavy cream. Continue to cook for an additional 2-3 minutes until the caramel is smooth. Remove from heat and stir in the vanilla extract and salt. Allow the caramel to cool to room temperature.

Frost the Cupcakes:
Once the caramel has cooled, beat in the powdered sugar, a little at a time, until smooth and spreadable. Frost the cooled cupcakes with the salted caramel frosting.

Garnish and Serve:
Sprinkle the frosted cupcakes with a pinch of flaky sea salt for the perfect sweet and salty balance. Drizzle with extra caramel sauce if desired.