Prepare the cake layers. Preheat oven to 350°F. Grease and flour two 8-inch round cake pans.
In a medium bowl, whisk together the flour, baking powder, and salt. Set aside. In a small saucepan, heat the milk, butter, and bourbon until the butter melts. Remove from heat and add vanilla. Set aside.
In a large bowl, at medium-high speed, beat the sugar and eggs until light. About 5 minutes. Reduce the speed and slowly add the milk mixture. Beat until incorporated. Scrape the sides of the bowl as needed. Add flour mixture and beat at low speed until just combined.
Evenly divide the batter into the prepared pans. Bake for 22-25 minutes or until golden brown and a toothpick inserted in the center of the cake comes out clean. Remove the cakes from the oven and place on a wire rack.
While the cake is baking, prepare the simple syrup by combining sugar, water, and bourbon in a small saucepan. Bring the mixture to a boil, stirring occasionally until all the sugar dissolves. Reduce the heat and simmer for 5 minutes. Remove from heat.
Remove the cake layers from the pans and evenly cut each layer horizontally as evenly as possible. Gently brush simple syrup over each layer allowing the liquid to soak into the cakes. Set aside.
Prepare the butterscotch sauce. In a medium saucepan, combine all the ingredients. Stir the mixture until well incorporated. Bring the mixture to a boil. Boil for 4-5 minutes. Remove from heat and add vanilla. Transfer to a container and allow the sauce to cool completely.
Prepare the buttercream. In a large bowl, beat the cream cheese and butter at medium speed until smooth. Add butterscotch sauce and beat at medium speed for 2 minutes. Scrape the sides of the bowl as needed. Reduce the speed to low and slowly add the powdered sugar. Increase the speed to medium and beat for 2 minutes.
Assemble the cake. Place 1 cake layer on a plate. Spread about ¾ cup frosting on top. Top with second layer and repeat the process. Cover with top layer. Spread the rest of the frosting over the top and sides of the cake creating a naked cake effect. Refrigerate the cake for 30 minutes or until the buttercream feels firm to the touch. Using a spoon, drip butterscotch sauce around the cake. Using a star tip, decorate the cake as desired.