The 2017 Tax Cuts and Jobs Act has been very effective so far, judging by low unemployment rates and strong rates of economic and wage growth. But why did it work?

The answer is that it closed loopholes in the tax code and lowered everyone’s tax rate. Simple tax codes with low rates are the best. As we explained at the time, the Trump tax bill changed important incentives, especially for corporations but also for individuals, that reward hard work and investment instead of rewarding clever accounting and gimmicks.