Preheat oven to 350 degrees F. Cream together butter and sugar for cupcakes. Add egg, water, sour cream, and molasses, and combine until smooth.
Add in flour, spices, baking soda, baking powder, and salt. Beat for 2 minutes on low speed.
Scoop into cupcake liners (2/3 full) and bake for 20-25 minutes or until a toothpick inserted comes out clean. Allow to cool completely.
With electric mixer, beat together cream cheese and butter until light and fluffy (about 2 minutes).
Add powdered sugar 1 cup at a time until thoroughly mixed. Add in vanilla extract and beat for 2 minutes.
Pipe frosting onto cupcakes and drizzle with caramel sauce. Enjoy!