Warren Buffett’s New Job & A Nonalcoholic Cheers to 2026 1/2/26

Summary

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Squawk Pod Episode Summary

Episode: "Warren Buffett’s New Job & A Nonalcoholic Cheers to 2026"

Date: January 2, 2026
Hosts: Becky Quick, Mike Santoli, Robert Frank
Guests: Heidi Heitkamp, Pat Toomey, Bill Shufelt

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Overview

In the first Squawk Pod of 2026, the team kicks off the year by reflecting on robust market returns, analyzing the significance of Warren Buffett officially stepping down as CEO of Berkshire Hathaway, and examining populist political shifts like the inauguration of New York City's new Democratic Socialist mayor, Zohran Mamdani. The episode also digs deep into the growing push for wealth taxes in states like California and trends in non-alcoholic beverage consumption, as Dry January begins.

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Key Discussion Points and Insights

1. Year-End Market Recap & Outlook

• Markets Closed 2025 with Solid Gains

  • NASDAQ up over 20%, S&P 500 up 16.4%, Dow up nearly 13%, Russell 2000 up 11.3% ([03:00] – [03:55]).
  • Communication services sector was the big winner, real estate was slightly negative.
  • Commodities surged: Gold up 64%, Silver up a remarkable 141%.

• Reflections on a Bull Run

  • Robert Frank notes, “Third straight year of double digit... This is a pretty expansive three-year bull market, most of it supported by earnings growth.” ([04:23])
  • Discussion about whether bullish trends can persist for a fourth consecutive year; historical perspective and skepticism about predictive seasonal indicators like the “Santa Claus rally” and January effect ([05:11] – [07:32]).
  • Tech dominance, specifically AI companies, seen as pivotal for 2026: “42 AI related companies generated 65 to 75% of all S&P 500 earnings and profits.” – Mike Santoli ([08:35])

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2. Warren Buffett Steps Down as Berkshire Hathaway CEO

• Transition to Greg Abel

  • Becky Quick highlights, “Warren Buffett has officially stepped down as CEO… handing over the reins to Greg Abel. Buffett remains chairman.” ([08:56]).
  • Buffett’s remarks on the change:
    “Everything will be the same…I won’t be up there speaking at the annual meeting, but I’ll be in the director section…But Greg will be the decider.” – Warren Buffett ([09:32]) “If the neighbors didn't know who he was, they wouldn't have any idea that, well, on January 1st, he is going to be the decider on a company that employs close to 400,000 people.” ([10:10])

• Abel’s Leadership Style and Berkshire’s Future

  • High praise from Buffett:
    “I'd rather have Greg handling my money than any of the top investment advisors or any of the top CEOs in the United States.” ([11:09])
  • Discussion on whether Berkshire’s decentralized, conglomerate structure can continue. Santoli: “There aren’t perhaps any other successful conglomerates that continue. And I think Abel is clearly one of the, if not the best operators...” ([13:35])
  • Company holds $381B in cash, with potential for big infrastructure or energy investments.

• Buffett’s Legacy

  • “He is going out, guys, after 60 years with probably the most impressive compound in interest record of anybody in history.” – Becky Quick ([11:56])
  • Reference to upcoming CNBC primetime special with previously unseen Buffett interviews; insight from his children about philanthropy ([15:34]-[16:29]).

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3. Populism & Politics: New York City's New Mayor

• Zohran Mamdani Sworn In
  • Mamdani’s progressive agenda:
    “It will be New Yorkers who reform a long broken property tax system… create a new Department of Community Safety… take on the bad landlords…free small business owners...” – Zohran Mamdani ([16:34])
  • Mamdani promises, “We will answer to all New Yorkers, not to any billionaire or oligarch…” ([17:16])
  • Inauguration featured Bernie Sanders and Alexandria Ocasio Cortez; signals Democratic Socialist momentum ([17:41]).
  • Discussion on feasibility: “The mayor, of course, does not have the ability to raise taxes in New York City. That has to be approved in Albany.” – Mike Santoli ([17:41])
  • Analysis of political consequences for Governor Hochul, balancing public demands and fiscal realities ([18:28]).

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4. Wealth Tax Wars: California’s Billionaire Exodus?

• Details on Proposed California Wealth Tax

  • Would tax California billionaires’ assets, even if valuations fall, with strict residency criteria ([25:55]-[26:57]).
  • Notable billionaires, e.g. Peter Thiel, Larry Page, and David Sacks, relocating to Miami, Austin, or out of state in anticipation.

• Pat Toomey & Heidi Heitkamp Debate Merits

  • Toomey:
    “We are not anywhere in this country…have we established the principle that the government is going to confiscate part of your assets to give them away…This would be a whole new idea...” ([27:29]) “It’s not going to be just billionaires. People are going to realize there’s no limiting principle here… The exodus will be profound.” – Pat Toomey ([28:36])
  • Heitkamp:
    “This is not a new idea. This is called a personal property tax…has been tried and failed in many, many states.” ([29:32]) “This is intrusive. This is not consistent with what we would call a taxable event.” ([30:10])
  • Both doubt the proposal’s viability and warn of unintended consequences. Heitkamp notes administrative challenges and that political overreactions are likely ([30:47]).

• Wider Inequality Debate

  • Toomey on solutions: “Strong economic growth does lift almost all boats… [also] fluidity and mobility within income categories.” ([32:13])
  • Heitkamp calls for more sophisticated tax reform, targeting loopholes (stepped-up basis, borrowing against assets) instead of kneejerk wealth taxes:
    “The left has to be more sophisticated in how they address these issues. And you can't just knee jerk the latest trend. It won't work.” ([35:28])
  • Toomey points out the top 1% already pay a disproportionate amount of taxes:
    “The top 1%...earn 20% of the income, pay 40% of all income taxes.” ([36:30])
  • Heitkamp: “I never hear from you a combination of payroll taxes along with these taxes.” Emphasizes different types of taxation ([37:23]).

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5. Non-Alcoholic Beverage Trend: Athletic Brewing & Dry January

• Surge in Non-Alcoholic Beer

  • Athletic Brewing’s Bill Shufelt explains meteoric growth: “Over that time we’ve grown our trailing 12-month sales by about 53% into a historically bad alcoholic beer environment. Non-alcoholic beer continues to truck right through that as a very durable megatrend.” ([40:34])
  • Shufelt on changing social norms:
    “We reinvented not only the taste and quality of nonalcoholic beer, but the branding and marketing of it. So you were proud to hold these drinks…” ([42:04])
    • “Over 53% of Americans perceive drinking one to two drinks a day as unhealthy, which is up 14 points in two years.” ([43:14])
    • Becky Quick: “I think it’s a status thing to actually show this is nonalcoholic rather than pour it in a glass.” ([43:14])

• Product Innovation & Market Expansion

  • In 2026, Athletic is launching non-alcoholic brewed cocktails (Paloma, Moscow Mule) and new beers, with a significant partnership with OpenTable.
  • Shufelt: “We launched over 50 beers on our website last year alone… we can just churn out the innovation and keep winning those awards.” ([45:02])

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Notable Quotes & Memorable Moments

• On Berkshire’s Unrivaled Performance ([11:56]):

  • “He is going out, guys, after 60 years with probably the most impressive compound in interest record of anybody in history.” – Becky Quick

• On Wealth Taxes ([28:36]):

  • “If you can confiscate the assets of a billionaire, why not someone who’s worth 500 million… The exodus will be profound.” – Pat Toomey

• On Taxing Unrealized Gains ([30:10]):

  • “This is intrusive. This is not consistent with what we would call a taxable event.” – Heidi Heitkamp

• On the Non-alcoholic Movement ([43:14]):

  • “I think it’s a status thing to actually show this is non alcoholic rather than pour it in a glass.” – Becky Quick

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Timestamps for Key Segments

• Market Recap and Outlook: [02:06] – [08:27]
• Buffett’s CEO Transition: [08:56] – [16:29]
• New York Politics & Mamdani Inauguration: [16:34] – [20:16]; repeated in [23:01] – [23:44]
• California Wealth Tax & Debate: [25:55] – [37:52]
• Athletic Brewing & Dry January: [38:13] – [45:56]

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Tone & Style

The episode balances expert analysis with conversational banter. Becky Quick provides concise summaries; Mike Santoli and Robert Frank deliver data-rich insights. Guests deliver nuanced debate with an emphasis on consequences, pragmatism, and historical context. The vibe is fast-paced, informative and approachable, with a nod to major national themes (business leadership change, populism, health trends) as 2026 begins.

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This summary distills the full range of significant topics, insights, and quotes, offering a clear structure and utility for listeners who missed the episode.

Transcript

[Host/Producer (Katie Kramer / Joe Kernan)]

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[Robert Frank]

Bring in show music please.

[Host/Producer (Katie Kramer / Joe Kernan)]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk the wealth tax that won't quit. How anti billionaire sentiment and policy is impacting our politics. Former senators Heidi Heitkamp.

[Heidi Heitkamp]

This is not a new idea. This is called a personal property tax.

[Host/Producer (Katie Kramer / Joe Kernan)]

And Pat Toomey.

[Pat Toomey]

The exodus will be profound. And these are the folks that pay the lion's share of the revenue to California. This is a disaster in the making if they proceed with this.

[Host/Producer (Katie Kramer / Joe Kernan)]

Dry January is here. We check in with the CEO of non alcoholic beer company Athletic Brewing.

[Bill Shufelt]

Over 53% of Americans perceive drinking one to two drinks a day as unhealthy, which is up TO I think 14 points in two years.

[Becky Quick]

I think it's a status thing to actually show this is non alcoholic rather than pour it in a glass. You're maybe showing off I'm drinking but I'm not.

[Host/Producer (Katie Kramer / Joe Kernan)]

Plus New Year, new boss. The first day for a new CEO at Berkshire Hathaway and New York swears in Mayor Zohran Mamdani.

[Mike Santoli]

This will be one of the most fascinating political stories to watch this year.

[Host/Producer (Katie Kramer / Joe Kernan)]

It's Friday, January 2, 2026. A new year of Squawk pod begins right now.

[Robert Frank]

Stand Becky by in three, two, one.

[Becky Quick]

Good morning everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ Marketsite in Times Square. I'm Becky Quick along with Mike Santole and Robert Frank. Joe and Andrew are off today. Markets are not though. If you check out what's happening with the US Equity futures, we are looking at some pretty decent science gains already on January 2nd. It looks like the Dow futures right now are indicated up by just over 200 points. S&P futures indicated up by about 44 the NASDAQ indicated up by close to 290 points. Of course this comes after four down sessions in a row to end 2025. But that doesn't mean that the markets didn't end with a bit of a bang. Anyway, we were looking at pretty decent sized returns. The NASDAQ composite or the NASDAQ 100 was up by about 20%. You saw very sharp gains for both the Dow and the S&P 500. S&P 500 was up by about 16.4%. And then the Dow closed up by just under 13% for the year. The three major averages and the Russell 2000 all had their six positive session out of six positive year out of the last seven. Dow was up by 13%, the S&P about 16.4%, the NASDAQ more than 20%. And then the small cap Russell 2000 up by about 11.3%. Though with Wednesday's market decline decline in December, The S&P 500 broke a seven month winning streak. So the best sector for the year last year it was communication services. That sector up by more than 32%. It was the only sector to end the year lower though was real estate. That was just barely negative. And then the commodities markets, gold and silver, they've been one of the big market stories this week. Gold actually ended the year up more than 64%. Silver was up by 141%. Both of them logging their best years since 1979. Same story for platinum with that. And by the way, both gold and silver are up once again this morning. In the meantime, the doll was down by 9.4% last year. It was its worst year since 2017. WTI crude oil was down by 20% for 2020. So the worst year it's seen in several years too. And then bitcoin and ether down by 6.7% and 11.3% respectively. It was the first negative year for each of those crypto currencies since 2022. How would you guys wrap this up? How would you look back at the year and say, here's what we think.

[Robert Frank]

Third straight year of double digit. I mean, the S&P 500 had been up 20% each of the prior two calendar year. So this is a pretty expansive three year bull market, most of it supported by earnings growth. So it wasn't really all about like, you know, specific exuberance dominating. I mean, obviously that was a big part of the story. What's interesting about the way the stock market finished is that we've kind of Gone sideways for two months. So most of those gains came in that huge six month sprint off the April lows. The tariff panic low. S and P closed the year basically where it had been in late October. But within that period you also, you started to see outperformance by financial stocks, by transportation stocks, cyclicals, economically sensitive stuff. So the market seems to be positioning for a better economic pace in the early part of this year even as tech had some profit taking. That was an undertow.

[Mike Santoli]

Yeah. I was looking at when was the last time that we had three years of double digit gains and then what happened after that? I know, you know there's a, is the late 90s.com but then it wasn't that long ago, 2009 to 2021. Then we had, of course the 2022 is now too because of the interest rate increase. But it doesn't, it didn't really tell us much about the likelihood or unlikelihood that this year is going to be down just because we've had three years of double digit.

[Robert Frank]

No, it does. Unusual trends are persistent.

[Becky Quick]

We did have Sam Stovall on Wednesday and he was talking a little bit about how rare it is to have four years in a row of big gains.

[Robert Frank]

That is true. Exactly. Usually things moderate. I mean, look, you start off every year with the kind of the odds in the bull's favor. 70% of all calendar years are up, you know, so therefore everyone's talking about, well if the first week is up, the whole year is going to be all that kind of stuff. Well, the more you stack the high probability outcomes, you know, together, the more it seems like a lock, but it's never a lock. So and usually even if it's strong, you're going to have scares along.

[Mike Santoli]

Do you see over time a real seasonal effect of January optimism?

[Robert Frank]

It's, there is a, there's January flows, there's January optimism. You know, a lot of professionals start with a blank slate and you know, all of a sudden they can kind of add to their risk budget.

[Mike Santoli]

Right.

[Robert Frank]

But I don't think it's been very precise in terms of handicapping what happens based on, I mean I know there are all these ways to slice and dice. Look, the Santa Claus rally period, right? We're down 1% over that. We have two more trading days for it. I don't pay attention to it because it's basically become just noise. It's become this irrelevancy. It was down the last two years and guess what? We were up the subsequent.

[Becky Quick]

Do you pay attention to the January.

[Robert Frank]

I mean I pay attention to the general tenor of the market to start the year. What you often have seen in January historically is what didn't do well last year get some relief and what did do well last year get some profit taking. It's obvious to try to sell into a new tax year if you just have appreciated stock. However the market tries to front run that because that's what we were seeing last week. So it's very tough to, to tease out. The one indicator that I think is, is really worth watching and it's one that doesn't trigger very often is if in the first quarter the you break December's low, that often is a sign of potential difficulty to come.

[Becky Quick]

That didn't count for last year because it was April. It was the second quarter before we had the.

[Robert Frank]

Well, look, I think, I mean I guess you could say, but also like what happened in April is the kind of trouble you're trying to see if it's on the way. It's not to say that the whole year is going to be a washout, just that the market is on less firm footing.

[Becky Quick]

I'll throw one more thing that I kind of watch in there and that's the Davos indicator. Well how the beginning of the year starts is not what happens in Davos and then Davos is often a counter indicator to what happens to the rest.

[Mike Santoli]

Well, there's also the big swing factor this year which is policy. Right. And so last year everyone is optimistic about deregulation, tax cuts.

[Pat Toomey]

Right.

[Mike Santoli]

What we didn't really, really see certainly until well after the inauguration was the tariff piece of it and that came in April. So there could be a lot of surprises. What I also think is interesting is last year it said that communications with the top sector. Yeah, the AI trade is really the determinant factor for 2026.

[Robert Frank]

Well by the way that was based Alphabet in terms of the communication services.

[Mike Santoli]

I wonder.

[Robert Frank]

So essentially up 60% added trillions in value. So that.

[Mike Santoli]

So there's a great note from JP Morgan of the weekend. 42 AI related companies generated 65 to 75% of all S&P 500 earnings and profits. So that really all the outlooks for this year from the Wall street banks. It's just where you land on AI. That's the determinant factor.

[Becky Quick]

We have some other news to tell you about too. Big changes in Omaha, Nebraska this week and the business community at large is taking note. Warren Buffett has officially stepped down as the CEO of Berkshire Hathaway, a company that he built over the last 60 years. And he's handing over the reins to Greg Abel. Buffett remains chairman. Of course. That announcement from Buffett about this transition coming back in May at the company's annual meeting, it was a surprise, not only to the shareholders, but to most of the board and to Abel himself. So what changes for Buffett today? Listen to what he told us just a few days after that surprise announcement.

[Warren Buffett]

Everything will be the same. You know, I will come in. I won't. I won't be up there speaking at the annual meeting, but I'll be in the director section. Maybe you'll interview me at halftime or something of the sort. Who knows? But Greg will be the decider. He can't imagine how much more he can get accomplished in a week than I can or a month. I mean, just. And at the same time, he's not a distorted individual, you know, I mean, he likes to play ice hockey with his kids, and he lives what would look like a normal life. And my guess is that if the neighbors didn't know who he was, they wouldn't have any idea that, well, on January 1st, he is going to be the decider on a company that employs close to 400,000 people. And he's got plans around to be around 50 or 100 years from now. And who knows what will happen, but it has a better chance, I think, of being here 100 years from now than any company I can think of.

[Becky Quick]

Abel is inheriting a Berkshire company with a huge stockpile of cash. It was over $381 billion as of the end of September. And after a year when the company gained just over 11% versus the S&P, which was up by almost 17%, Abel, of course, will run all of Berkshire, having the final say on both investments and holding companies. Buffett offering some high praise of his successor, listening to that as well.

[Warren Buffett]

And Greg's operated more than I have, when you get right down to it. I mean, he's gone over to England to run something. He went out. You know, he came to a mall one time to run a business for a few years. And he knows there's no secret formula that only CEOs have or anything of the sort. So I'd rather have Greg handling my money than any of the top investment advisors or any of the top CEOs in the United States.

[Becky Quick]

That is a huge endorsement.

[Warren Buffett]

It is a huge endorsement, but it's an endorsement we've made. And I am going to have him handling the money. In effect, he knows business.

[Becky Quick]

So does Warren Buffett. And in fact, he is going out, guys, after 60 years with probably the most impressive compound in interest record of anybody in history. Berkshire shares. I think I saw a statistic the other day that said they could drop more than 99% and they still would have outperformed the S and P. Exactly. Hundred.

[Robert Frank]

Yeah.

[Becky Quick]

Over his 60 years running Berkshire.

[Robert Frank]

Absolutely. I mean, so it's, it's going to be unrivaled forever. I think what's really fascinating is how the character or the, the sort of profile of the company might evolve under Greg Abel. I've always assumed it was going to be a lot less about, you know, the invest in public shares of other companies, you know, that portfolio manager type approach. Even though it's going to be there. Right. You have all these great investments. I just wonder on the operating side what that means and if it's going to be more centralized or, you know, how that really does break from here and how the market view, I mean, the underperformance this year, first of all, beat the average stock. It was up huge into May on the exact announcement. Right.

[Becky Quick]

Huge. Until he announced he was stepping down. But I don't think it has collapsed as some people thought it would at some point at all. Without Buffett being there.

[Robert Frank]

That's right.

[Becky Quick]

That's important to that continuity.

[Robert Frank]

Without it, it's almost like anybody who would have sold because of that did it. Yeah. Or is about to, you know, is in the process of doing it. And I do think there are questions we were asking last week. Like, for example, you know, there's always been this advantage of the, the, the status element of selling to Warren Buffett and becoming a partner of Warren Buffett's. If you do sell your company to Berkshire, is that going to go away? Is it going to be maintained?

[Mike Santoli]

Yeah. And I think, you know, Mike, you've said before, there aren't a lot, perhaps any other successful conglomerates that continue. And I think Able is clearly one of the, if not the best operators, if you're going to try to do that. But whether that can be sustained. Because the history of conglomerates in this country is not great. But you're right, that essentially what it is, along with this huge cash pile of $380 billion, it's not, it's not.

[Robert Frank]

Great in general, but. But the way Berkshire runs a conglomerate, they're not pretending that there are magical synergies among all these companies that offset. It's just saying, you tell me what you need to run the business or reinvest in the business, send the cash back to us. We'll figure out what to do with the service.

[Mike Santoli]

And a company like NetJets benefits from the low cost capital which is across the portfolio. One of the huge advantages that they have in all their business is that low cost.

[Becky Quick]

I mean, it's always been about float, the insurance companies generating the float and then taking and reinvesting back. And Warren Buffett has been very clear about the idea that Greg Abel is going to have the ability to manage all that cash. You're right. I don't know if it'll be stuck, stuck into stocks the same way. But what they talked about at the last annual meeting in May was this idea that you might take a lot of that money and invest in infrastructure projects or something to do with Mid American Energy or Berkshire Hathaway Energy, as it's now called, or any of these other things. There's a lot of big deals. But I'll tell you, Buffett even said at the time, I wish somebody offered me a $100 billion deal today. They don't want this cash sitting around. They would like to deploy it, would like to put it to work. Buffett's still going to be there as chairman, which gives Greg Abel a lot of protection and a lot of Runway to run the company the way he sees fit. I think of it a little bit the way you had Doug McMillan come in at Walmart where he had the backing of the Walton family. He did some things at the beginning that caught Wall street off guard, reinvesting in things. The stock sold off, but the Walton family supported him. And look at what happened with the next 11 years, how Doug ran that company too.

[Mike Santoli]

That's a good analogy, folks.

[Becky Quick]

By the way, a programming note for you. While Buffett has said that he is going quiet, the sound that you just heard from him is part of a new primetime special that we're putting together. We're bringing it to you here on cnbc on Tuesday, January 13th at 7pm Eastern Time. In a series of never before seen interviews, we spoke to Warren about his philosophies on business, philanthropy, on life, and how his perspectives have changed over the decades. Buffett's three children, Susie, Howey and Peter, also join us to discuss the monumental task that their dad has given them, which is to eventually give away his entire fortune. But it's an interview I don't think.

[Mike Santoli]

You want to miss. I can't wait to watch that, because they are going to become instantly the, if not among the most important philanthropists in the country.

[Becky Quick]

Yeah, agree.

[Mike Santoli]

And they've been trained for it.

[Becky Quick]

They have. They've spent decades at this point running their own philosophy or their own philanthropies and figuring out what works and what doesn't.

[Robert Frank]

Yeah.

[Becky Quick]

And they're going to be working together, which is really interesting, too.

[Zohran Mamdani]

It will be New Yorkers who reform a long broken property tax system. New Yorkers who will create a new Department of Community Safety that will tackle the mental health crisis and let the police focus on the job they signed up to do. New Yorkers who will take on the bad landlords who mistreat their tenants and free small business owners from the shackles of bloated bureaucracy.

[Mike Santoli]

Zoran Mamdani vowing an agenda aimed at making New York more affordable for working people. In a speech following his swearing in as New York City's next mayor, Mamdani promoted some of the central themes of his campaign, including universal childcare, free buses, more affordable rent.

[Zohran Mamdani]

We will answer to all New Yorkers, not to any billionaire or oligarch who thinks they can buy our democracy. We will govern without shame and insecurity, making no apology for what we believe. I was elected as a democratic socialist, and I will govern as a Democratic socialist.

[Mike Santoli]

A lot of excitement there. Mamdani's inauguration of 40,000 people braving the cold. Also featuring speeches by fellow Democratic socialists, Senator Bernie Sanders of Vermont, New York Representative Alexandria Ocasio Cortez. And you know, it'll be interesting to see we've got the New York governor race this year. Interesting to see where and whether he can get the money for these programs, what he can actually do. Mayor, of course, does not have the ability to raise taxes in New York City. That has to be approved in Albany. But we saw Governor Hochul there right next to Mamdani, showing her position, at least with regard to some of his policies. This will be one of the most fascinating political stories to watch this year. He is just a mayor, but it is New York City and he has galvanized a lot of energy in this party.

[Becky Quick]

I mean, that's the really interesting thing. I feel like Hochul is Governor. Hochul will be in a little bit of a pickle. She's the one who will have to do all the things that voters hate, which is raise taxes, in order to allow him to continue the agenda that he has run on. If she doesn't do it, she's the one stopping his agenda and irritating everybody who supported it. If she does do it, she's the one who's going to be the one who raised taxes.

[Mike Santoli]

And look, we all know here, it.

[Becky Quick]

Seems, and so far she's been saying she's not going to raise taxes.

[Mike Santoli]

Absolutely. She has given a little bit on the corporate side. She may raise the corporate taxes, but that's going to cost New York. And we can sit around here and we know what it means when the wealthy leave, when companies leave. But look, we are in a very populous time when most Americans are really under pressure from inflation and they see the asset prices for the asset wealthy continue to rise. So it goes without saying that taxing the wealthy is more popular than ever right now. We see what's happening in California. So there is a lot of pressure both within her party, but also, I think, among voters.

[Robert Frank]

Hey, we've just got, we just got higher salt ceiling $40,000 for. But for the majority of voters, that's still material. I also feel like you're starting from a point where New York's never been a low tax venue. Right. So it's not as if, oh my gosh, the identity of New York as a tax haven is going to go away. So I think, I think all those things fit into the debate a little bit here. Meanwhile, the affordability stuff, he's talking about permitting rules and all the other stuff that is within the mayor's control. Who knows if it's really going to matter, you know, to, to get more housing built. But at least rhetorically, you can sort of say, look what I'm doing over here, that seems a little bit more private sector solution compatible.

[Becky Quick]

Yes, but free buses, free daycare, like a lot of these things, you need money to pay for those things.

[Robert Frank]

The daycare for sure is a very, very expensive and tough proposition.

[Becky Quick]

You need money to be able to do that. You need higher taxes for that. But then do the higher taxes work if you lose the highest, the wealthiest out there. So there are questions that come with it. I did like Bernie Sanders. You saw him clapping and sitting there. So different from the meme from, remember Joe Biden's inauguration when Bernie Sanders was the meme sitting out there in the same coat. It looked like that he was wearing from that with his mittens.

[Robert Frank]

I would bet a lot that it's the same coat.

[Becky Quick]

I bet it's a true.

[Mike Santoli]

It looks just like it.

[Becky Quick]

It looks just like it. By the way, I can't criticize. I think I'm wearing the same coat from years ago.

[Mike Santoli]

Cheese will be next.

[Host/Producer (Katie Kramer / Joe Kernan)]

Coming up on Squawk Pod. Are billionaires really about to leave California in droves because of a new tax on the wealthiest. Former Republican Senator Pat Toomey joins us.

[Pat Toomey]

It's not going to be just billionaires. People are going to realize there's no limiting principle here. If you can confiscate the assets of a billionaire, why not someone who's worth 500 million or 100 million?

[Host/Producer (Katie Kramer / Joe Kernan)]

And former Democrat Senator Heidi Heitkamp, I.

[Heidi Heitkamp]

Think there's a whole lot of ways to address income inequality, a whole lot of ways to address the perception, if not reality, that rich people are not being taxed than to simply embrace a wealth tax.

[Host/Producer (Katie Kramer / Joe Kernan)]

We'll be right back.

[Pat Toomey]

Struggling to fall asleep Meet the Ergo Pro Smart base from Tempur Pedic. Its gentle massage and relaxing sounds help calm your mind every night during the Tempur Pedic New Year event. Save up to $500 on select adjustable mattress sets. Shop now at Tempur pedic.com select adjustable mattress sets. Only lesser savings may apply.

[Bertolli Brand Announcer]

For over 160 years, Bertolli has brought Italian inspired flavors to kitchens across the country. Bertolle Alfredo is the number one selling Alfredo sauce, according to Serkana Pasta Sauce Data as of October 2025. It's a blend of fresh cream, real butter and aged Parmesan cheese. Bertolle's new garlic vodka, the tomato and basil and the d' Italia Alfredo make every meal spectacular. Find Bertolli sauces at your nearest grocery store or on Social Bertoli and click the link in their bio.

[Becky Quick]

What made you confident that you could do something that hadn't been done before? I have no fear of failure.

[Host/Producer (Katie Kramer / Joe Kernan)]

Trailblazing women, changing the game One of.

[Becky Quick]

My favorite pieces of advice, Think about what your boss's boss needs.

[Host/Producer (Katie Kramer / Joe Kernan)]

Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.

[Becky Quick]

Think big to accomplish big things.

[Host/Producer (Katie Kramer / Joe Kernan)]

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts. Welcome back. This is squawkpod from CNBC Today with Becky Quick, Mike Santoli and Robert Frank.

[Becky Quick]

Zora and Mamdani vowing an agenda aimed at making New York more affordable for working people. In a speech following his swearing in as New York City's mayor, Mamdani promoted some of the central themes of his campaign, including universal childcare, free buses and more affordable rent.

[Zohran Mamdani]

We will answer to all New Yorkers, not to any billionaire or oligarch who thinks they can buy our democracy. We will govern without shame and insecurity, making no apology for what we believe. I was elected as a Democratic socialist, and I will govern as a Democratic socialist.

[Becky Quick]

Mamdani's inauguration also featured speeches by fellow Democratic socialist Senator Bernie Sanders of Vermont and New York Representative Alexandria Ocasio Cortez.

[Mike Santoli]

And the big chant at that rally was, tax the rich. That was the big chance. And speaking of that, we're gonna go to a wealth proposal in California that has angered some of the state's richest and some in the startup community. One of the big questions around the proposed billionaire tax is valuations. So Most of the 200 billionaires in California made their wealth in tech, usually a stake in a private or a public company. Tech companies, as we all know and have seen, are highly volatile. So let's say your stake in a tech company was worth a billion dollars. As of January 1st next year, you would owe $50 million tax. If that valuation falls, let's say by half in a few months, you would still owe that $50 million tax. In other words, tough. The bill makes no mention of refunds or credits. Now, the issue is especially important given the volatility of tech stocks and valuation. Last year, the AI boom created 50 new billionaires, many of them in California. If AI valuations could decline, some of those billionaires will no longer be billionaires, but they still owe a well tax on wealth that they no longer have. Now, the bill does make provisions for private companies or illiquid assets that allows them to pay over five years, but the amount that is owed actually doesn't change. And there are penalties of up to 20 to 40% of the amount owed for those who fail to pay. So a lot of people I've talked to, a lot of tax attorneys that are helping a lot of Californians either make plans or move out of California. The question will be, because this is retroactive to yesterday, you have to prove you're no longer a tax resident as of January 1, 2026. Did they get enough time? Will it sort of withstand the legal challenges that it will inevitably face? But there are a lot of billionaires in California and soon to be billionaires that are trying to leave, planning to leave, at least finding out what it takes to leave California.

[Becky Quick]

Well, there were a flurry of announcements that went out. Peter Thiel making a point of saying that his new office in Miami is set. Raven Sachs said that he's got a new office that just opened in Austin, Texas. And I think Peter Thiels signed December, signed the lease for their extension on that. What was Larry Page's?

[Mike Santoli]

Larry Page, Same thing. He's got a family office in Miami. His family office head is now spending a lot of time in Miami. Now, the question of residency isn't just did you leave or were you out of the state for more than 180 days? It has to do with your bank accounts, where your kids are in school, where your pet goes to the vet, where your dentist is. So unless you've shown a pattern of all those things being in Texas or Florida for the past year, and the California auditors are very tough, even tougher than New York when it comes to forcing you to prove that you have actually left. So that's going to be a question along with can you actually make will the tax itself survive legal claims, but can you make a tax retroactive? That's going to be another big question.

[Becky Quick]

Yeah. All right. Joining us right now for more on the wealth tax debate is Heidi Heitkamp. She is former Democratic senator of North Dakota, also a CNBC contributor, and Pat Toomey, who is former Republican senator of Pennsylvania. And welcome to both of you. Senator Toomey, why don't we give you first dibs at this because I want to get into Heidi's more nuanced view of some of these things. But what's your takeaway on whether attacks like this is A, legal and B, effective?

[Pat Toomey]

Well, so the bottom line is I think this is a remarkably bad idea from a state that is quite generous in providing us with bad ideas. First and foremost is the principle here we are not anywhere in this country, to my knowledge, have we established the principle that the government is going to confiscate part of your assets to give them away to people who, to whom they don't belong. This is something new and different. We definitely take income. We take a disproportionately high share of the income from upper income people, certainly relative to their share of of earnings. And that's because we have an extremely progressive tax system. It's one of the most progressive in the entire oecd. But this would be a whole new idea that we're going to just confiscate part of your assets after in most cases people have paid income taxes on whatever it is that allowed them to accumulate these savings. A couple of other points I would make about this particular proposal. First of all, it's a lot of false advertising when they suggest this is going to be a one time hit. That's the way it's drafted. But it also stipulates in the proposal that any revenue from this new tax has to go to expanding health care. And that means Medicaid as a practical matter, as we've seen, including very recently with respect to Obamacare, any time you expand an entitlement, the left intends that that expansion is permanent. And when the funding runs out and the spending continues, they're coming back for more. And when the exodus of billionaires, it's not going to be just billionaires. People are going to realize there's no limiting principle here. If you can confiscate the assets of a billionaire, why not someone who's worth 500 million or 100 million? And so the exodus will be profound. And these are the folks that pay the lion's share of the revenue to California. This is a, this is a disaster in the making if they proceed with this.

[Becky Quick]

Senator Heitkamp, I'd ask you to defend the principle here and take the other side of that argument, but I don't think you want to.

[Heidi Heitkamp]

Well, I've long said you can't really be successful in taxing unrealized capital gains. I will disagree with Pat on one thing. He says this is a new idea. This is not a new idea. This is called a personal property tax. And this personal property tax has been tried and failed in many, many states. It's been tried in a lot of other places across the world, and they've had to put the car in reverse and say it didn't work. And so let's also recognize that this is an initiative. They're going to need to get a lot of signatures. The governor of California has already suggested that he doesn't agree with this. I think some of this is an overreaction. But of course, when you're looking at an effective date of this retroact, actively, I think that that causes a lot of concern when people look at it. But, you know, the bottom line is that this is intrusive. This is not consistent with what we would call a taxable event. And Becky, as you know, also on my resume is I used to be a tax commissioner. I used to do this for a living. And these are very, very hard to administer. And I think the left has gotten this idea that we don't really need to dig into the tax code to find those loopholes. What we really should do is just do new tax. And I think there's a whole lot of ways to address income inequality, a whole lot of ways to address this in, you know, the perception, if not reality, that rich people are not being taxed, then to simply embrace a wealth tax. I don't think it will work. I don't think it's going to pass. And I agree with Pat on one thing, that people, when they go to the polls, they say, a billionaire today, it's me tomorrow.

[Becky Quick]

Right. So because I don't think either of you is going to defend this in any way, shape or form or say you're in favor of it, maybe we should turn this into a little bit of a broader conversation about the inequity that's out there right now that has been growing since Occupy Wall street all the way back in the, in the financial crisis period. What we see in terms of populism at this point point and how you address that and how you get at it, it's certainly been exacerbated by the massive inflation that came around post Covid or during COVID And then beyond that, what we've seen that still impacts people and it's hitting them in lots of different ways. Pat, how would you get at trying to handle that and deal with it and maybe get at some of that inequality?

[Pat Toomey]

Yeah, Becky, I think a couple of things. One, I think we should keep in mind monetary policy can drive a lot of this and excessively easy money helped to drive up financial asset values in ways that are very beneficial for people who have financial assets. Lower income people tend not to have financial assets. So, so that's kind of unfair. But the most important thing in my view is two things. One, strong economic growth. Strong economic growth does lift almost all boats. We have seen that when the economy is growing strong, including right after the 2017 tax reform, for instance, real wages were rising and they were rising fastest for lower income workers. That is the definition of narrowing the income gap. And then the last thing that's really, really important is that we have fluidity and mobility within income categories. So people who are born into the lowest category of, say, the lowest quadrant of earners, it's really important that we be in a society where that person has a realistic chance to move up. That has historically been the case. It's not as robust as I'd like to see it, but that's what I would focus on, economic growth and income mobility.

[Mike Santoli]

And Heidi, I just want to go back to Becky's point and follow up on that because I think one of the challenges for voters here when they look at someone like Larry Ellison, Sergey Brin, Larry Page, those are three of the top five wealthiest Americans and they all live in California, is that basically all of them can live, not tax free income, but certainly use their shares. Larry Ellison owns 42% of Oracle, but he hasn't sold shares and doesn't need to because he can just borrow off those shares and use that income. How do you get it, all of that wealth that for these folks will some would say, never get taxed, especially if it goes to charity or is passed down through a trust to their children. Is there some way to tax that or at least make sure that some of that income they get from borrowing against their shares faces some kind of, maybe a capital gains tax or is there another way around that?

[Heidi Heitkamp]

I think, I think the first thing you need to address is stepped up basis. And so if my kids inherit my stock, they inherit Apple at a much lower basis than the Fairmont market value. And there, that is a wealth multiplier. And it has created huge consequences, whether it is donations to charity or whether it is transfer at wealth. You know, and so I think there's.

[Mike Santoli]

A lot of things that has to be national policy.

[Heidi Heitkamp]

Right, right. And, but, but you know, if you look at, if you look at California, California has the ability to basically tax that death and they can determine what the basis of that tax is. And so when you look at borrowing against those assets, that has been kind of the trick to avoid any kind of capital gains. And that needs to be addressed in terms of a tax loophole along with carried interest and stepped up basis. And so there's a lot of things that you could do if you really understood how the tax code worked. Instead of knee jerking, we're going to impose a wealth tax and that's going to solve the problem. It won't solve the problem long term. And so do we need to have an absolute discussion? And you know, Pat, one of the things I would say is yes, for the first Trump term, you saw the lower quartile, the lower third rate wages raised. That's not been true into this, you know, this tranche of the Trump administration, in fact, the lower quadrant has actually seen less growth than the middle class or the upper class. And so there is a, the Republicans have to begin to address the affordability that, the growing sense of insecurity of people who work in this country who feel like they're not getting a fair shake. And you see it in New York and you'll see it probably in California during this vote. But the left has to be more sophisticated in how they address these issues. And you can't just knee jerk the latest trend. It won't work.

[Pat Toomey]

But Heidi mentions a number of ways to raise more taxes from wealthy people without resorting to this terrible California proposal. I would just point out, and I'm in favor of closing loopholes that broaden the base on which we apply lower rates. I think that's the right principle for a tax code. But you know, the top 1% of American earners earn roughly 20% of all the income and pay roughly 40% of all the income taxes. So the fact is upper income people are already paying a disproportionately high share of the taxes. And I never hear from my Democratic friends who want to get more still. How high does that have to go in order to be fair? Does it have to pay three times their share of income, four times their share of income? There's a lot of taxes being paid by upper income people.

[Heidi Heitkamp]

Yeah. And Pat, I never hear from you a combination of payroll taxes along with these taxes.

[Pat Toomey]

But as you know, payroll up and insurance are a very different category. Heidi.

[Heidi Heitkamp]

Well, payroll taxes, you're talking about entitlement and entire Medicare.

[Mike Santoli]

Yeah.

[Pat Toomey]

Well, that is the justification for considering that an earned benefit because it is supposed to be funded primarily by payroll taxes. The rest of government is funded primarily by income taxes.

[Becky Quick]

Very smart conversation from two very smart people who understand the tax. We appreciate it. It's good to see both of you and we'll have you back to talk about some real issues that might actually help. All these things that you two are bringing up are perfect. Heidi, Pat, thank you both.

[Pat Toomey]

Happy New Year.

[Becky Quick]

You too.

[Host/Producer (Katie Kramer / Joe Kernan)]

Next up on Squawkpot, a new year, new drinking habits. CEO and co founder of Athletic Brewing, Bill Shufelt joins us. He's riding the waves of non alcoholic drinks.

[Bill Shufelt]

We have brewed cocktails the Paloma and the Moscow Mule at select retailers like Target, Whole Foods, Wegmans, HEB across the country that are delicious and surprisingly so. I didn't think they'd be in my wheelhouse.

[Bertolli Brand Announcer]

For over 160 years, Bertolle has brought Italian inspired flavors to kitchens across the country. Bertolle Alfredo is the number one selling Alfredo sauce according to Serkana Pasta Sauce Data as of October 2025. It's a blend of fresh cream, real butter and aged Parmesan cheese. Bertolli's new garlic vodka, the tomato and basil and the d' Italia Alfredo make every meal spectacular. Find Bertolli sauces at your nearest grocery store or on Social Bertolli and click the link in their bio.

[Becky Quick]

What made you confident that you could do something that hadn't been done before? I have no fear of failure.

[Host/Producer (Katie Kramer / Joe Kernan)]

Trailblazing women and changing the game.

[Mike Santoli]

One of my favorite pieces of advice.

[Becky Quick]

Think about what your boss's boss needs.

[Host/Producer (Katie Kramer / Joe Kernan)]

Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.

[Becky Quick]

Think big to accomplish big things.

[Host/Producer (Katie Kramer / Joe Kernan)]

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts, you're listening to squawkpod.

[Becky Quick]

The quiet after the storm that was New Year's Eve. There's still a lot of confetti that is rolling around. It's made its way into the building, into the parking garages, all over the place. Yeah. But here we are. Things are a little quieter today. You're watching Squawk Box right here on cnbc. I'm Becky Quick along with Mike Santoli and Robert Frank. Joe and Andrew are off today.

[Mike Santoli]

A new year brings new resolutions, usually about health, like drinking less alcohol. Joining us now is the co founder of a company that's been riding the sober, curious wave, Bill Schuffelt, the CEO of Athletic Brewing. Bill, thank you so much for joining us. Great to have you. So what's the growth been like in the industry as a whole? And I know you guys have a huge share of non alcoholic brews at 36% something like that. What's driving the growth and what does that growth look like in the year or two ahead?

[Bill Shufelt]

Yeah, thank you so much for me having me on. Huge fan of the show. I guess in the last 18 months since I was here last. Athletic, we're talking about our, our growth round from General Atlantic where we raised $50 million to accelerate our growth. And over that time we've grown our trailing 12 month sales by about 53% into a historically bad alcoholic beer environment. Yeah, you see all the headlines where alcoholic beer tends to be down 3 to 6 to 10% across the board. Non alcoholic beer continues to truck right through that as a very durable megatrend for a lot of reasons on the athletic side, outside that, we have grown our share in the category despite hundreds of entrants literally into the category. We're about an 18.4 share of the category overall, 52% share of non alcoholic craft beer. So outselling all 150 plus non alcohol craft half beers combined behind us. And then we took that growth capital and built another big brewery on the west coast which we just commissioned this past October of 2025. But that's one of the biggest west coast breweries in the country.

[Mike Santoli]

And you mentioned there are a lot of reasons for that growth. I think what we've read a lot about is Gen Z just doesn't like to Drink. Some of it has to do with they just don't socialize as much. Some it has to do with the availability of marijuana and, and cannabis out there. What, what are you seeing as the big drivers for why people are they switching or is it just going from seltzer to non alcoholic craft?

[Bill Shufelt]

Yeah, I think so. I mean just take it to my story too. Like I have a whoop on one hand, apple watch on the other hand. I came from a finance background where I was in the seat at 6am for 12 years and like I was go, go, go. Also fast bashing myself as a husband and a father and a recreational athlete. Life these days, you know you have your work in your pocket 247 it it leads to more moderation. I don't think it's that Gen Z hates alcohol, hates having fun. Everyone still wants all the experiences with their colleagues, their family. They want fine culinary experiences. The problem was that other side of the menu didn't exist previously. So there's really no option to be, be moderate and have those things. So what we did was we reinvented not only the taste and quality of nonalcoholic beer, but the branding and marketing of it. So you were proud to hold these drinks for the first time with the label out and now we've seen those trends really take hold. Just to put some stats behind it, in a Gallup poll this past summer it fit over 53% of Americans perceive drinking one to two drinks a day is unhealthy, which is up I think 14 points in two years.

[Becky Quick]

I think it's a status thing to actually show this is not alcoholic rather than pour it in a glass. You're maybe showing off I'm drinking, but I'm not.

[Bill Shufelt]

Ten years ago it was like impossible to order a discreet non alcoholic beverage in a work setting or with friends. And so we really wanted to change that. And then also it's a record low. Americans are drinking alcohol on a weekly basis, which I think is 54% and that's also down eight points over that same two year period.

[Mike Santoli]

Now I, I'm really into fitness. I don't drink, but I was looking at your nutrition label and I was looking at the carbs in there and obviously I asked what's. Obviously the calories aren't so bad compared to regular beer, but to make it taste good, it does seem like you have more carbs than regular beer. So how do you see that as terms of your health proposition?

[Bill Shufelt]

Yeah, well, honestly we have something for everyone really on the low End of the spectrum, our athletic light lager, which is an award winning lager taste is 25 calories, no sugar and five carbs. Five carbs is good. That is a guilt free sipper any hour of the day. But the nice thing with non alcoholic beer, non alcohol, nonalcoholic beer tends to be 20 to 30% of the calories of an alcohol equivalent style because ethanol is so calorie dense. So our IPAs and a lot of sugar, a lot of IPAs are 200 to 500 calories. So we've won 185 Global Taste Awards, 33 last year alone. And our IPAs, I would challenge anyone to be the best weeknight food pairing there is. And that's only 65 to 75 calories, which is pretty digestible for a real weekday treat.

[Mike Santoli]

And we've got to wrap it up. But I know you're expanding into what looks like mocktails or a whole other category. What's that about?

[Bill Shufelt]

Yeah, I almost forgot to talk about January. It's this is like the super bowl for non alcoholic drinks. Introducing a new customers. We have a huge partnership with OpenTable this month and then more innovation than we've ever had launching this year. We have brewed cocktails, the Paloma and the Moscow Mule at select retail retailers like Target, Whole Foods, Wegmans, H E B across the country that are delicious and surprisingly so. I didn't think they'd be in my wheelhouse. And then this year we have a lot of innovation building off our core lineup. Our athletic light lime and salt is really fun and guilt free on the nutritionals. But then we have, we launched over 50 beers on our website last year alone on athleticbrewing.com because we unlike most brands in the category we, we actually have built breweries have our own brewing and quality teams. We've built four breweries now and so we can just churn out the innovation and keep winning those awards. Love it.

[Mike Santoli]

Bill, thanks so much for joining us. Happy New Year.

[Becky Quick]

Yeah, here's to dry January for sure.

[Bill Shufelt]

Yeah. Look forward to be back with more news before too long, hopefully.

[Host/Producer (Katie Kramer / Joe Kernan)]

And that is Squawk Pod for today. Thank you for listening to this first podcast of 2026. Squawkbox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. They will all be back next week. Please tune in on TV weekday mornings on CNBC at 6 Eastern or get the smartest takes and analysis from our TV show right into your ears when you follow Squawkpod. Wherever you get your podcasts we'll meet you right back here on Monday. Have a great weekend.

[Mike Santoli]

We are clear.

[Robert Frank]

Thanks, guys.

[Bertolli Brand Announcer]

For over 160 years, Bertolle has brought Italian inspired flavors to kitchens across the country. Bertolle Alfredo is the number one selling Alfredo sauce according to Circana Pasta sauce Data as of October 2025. It's a blend of fresh cream, real butter and aged Parmesan cheese. Bertolle's new garlic vodka, the tomato and basil and the d' Italia Alfredo make every meal spectacular. Find Bertolli sauces at your nearest grocery store or on Social Bertoli and click the link in their bio.