  The long wavelength moir\'e superlattices in twisted 2D structures have
emerged as a highly tunable platform for strongly correlated electron physics.
We study the moir\'e bands in twisted transition metal dichalcogenide
homobilayers, focusing on WSe$_2$, at small twist angles using a combination of
first principles density functional theory, continuum modeling, and
Hartree-Fock approximation. We reveal the rich physics at small twist angles
$\theta<4^\circ$, and identify a particular magic angle at which the top
valence moir\'e band achieves almost perfect flatness. In the vicinity of this
magic angle, we predict the realization of a generalized Kane-Mele model with a
topological flat band, interaction-driven Haldane insulator, and Mott
insulators at the filling of one hole per moir\'e unit cell. The combination of
flat dispersion and uniformity of Berry curvature near the magic angle holds
promise for realizing fractional quantum anomalous Hall effect at fractional
filling. We also identify twist angles favorable for quantum spin Hall
insulators and interaction-induced quantum anomalous Hall insulators at other
integer fillings.
