Two syllables or three — and both are in the dictionary
Both pronunciations are correct. American dictionaries list the three-syllable CARE-uh-mel (or CAR-uh-mel) and the two-syllable CAR-mul side by side. Neither is marked as an error, and neither is the "real" one. What separates them is mostly geography and family habit, which is exactly why people feel so strongly about it: the way you say caramel is the way the people who raised you said it.
The question was common enough to earn its own entry in the Harvard Dialect Survey, the large online study of American regional speech that produced the famous soda/pop/coke maps.
A word that traveled through French and Spanish
English took the word from French caramel in the eighteenth century. French had it from Spanish or Portuguese caramelo, whose earlier history is uncertain — one theory links it to the Latin word for a reed or cane, as in sugar cane. In every one of those languages, the word has three syllables, which gives the three-syllable camp the argument of history.
English, however, has a long habit of swallowing unstressed middle vowels. Chocolate is CHOK-lit for most Americans; family often comes out as FAM-ly; camera as CAM-ra. Seen in that company, CAR-mul is not a mistake but an ordinary sound change, and it is far from unique.
Where each camp lives
The two-syllable pronunciation is most often reported in the Midwest and the West, while three syllables are usually associated with the East Coast and the South. The pattern is not tidy: plenty of families split, and many people switch depending on context — CAR-mul for the candy, three careful syllables for a menu description.
There is also a second, smaller confusion folded into this one: caramel and Carmel, the California town, sound identical in the two-syllable version. Some three-syllable speakers argue that's reason enough to keep the vowel.
Food words carry identity
Pronunciation fights about food last longer than most, because food words are learned early and at home, long before school has any say. Pecan, mayonnaise, salmon and almond all spark the same kind of argument for the same reason.
Caramel adds a twist of its own: the word names both a flavor and a stage of cooking. Pastry cooks talk about taking sugar "to caramel," and in professional kitchens the full three syllables tend to survive, as they often do in technical vocabulary. At the candy aisle or the ice cream counter, the shorter form takes over. The same person can easily use both in a single afternoon without noticing.
Before you vote, say "salted caramel" out loud without thinking about it. The number of syllables you produce is your real answer — and the tally will show whether America leans two or three.
Sources: Merriam-Webster entry and pronunciations for "caramel"; Harvard Dialect Survey (Bert Vaux), caramel pronunciation question; etymology of "caramel" via French and Spanish per standard etymological dictionaries.