Preheat oven to 350 degrees.
Mix butter and sugars on medium speed until pale and fluffy (about 4 minutes). Add in eggs one at a time, stirring after each addition until combined. Add vanilla. Add in dry ingredients and mix until combined.
Scoop dough out 2 tbsp. at a time and roll into a ball (make sure your hands are floured). Press caramel into the center, sprinkle with a pinch of coarse salt and enclose caramel with cookie dough. Shape into a ball once more and align cookies on Silpat lined or buttered cookie sheets.
Bake 11 - 13 minutes. Allow cooling on cookie sheet for 5 minutes. Dip in powdered sugar. Devour.