Sentence Correction

I know this q was discussed quite a few times in forums, but I mentioned again to clear my doubt.
What is the subject of this, where "have" referring to. Is it not "the proposal" (singular).

thxs a lot.

48. According to some analysts, whatever its merits, the proposal to tax away all capital gains on short-term investments would, if enacted, have a disastrous effect on Wall Street trading and employment.

(A) its merits, the proposal to tax
(B) its merits may be, the proposal of taxing
(C) its merits as a proposal, taxing
(D) the proposal's merits, to tax
(E) the proposal's merits are, taxing

Verb is not HAVE, it is would have.

According to some analysts, whatever its merits, the proposal to tax away all capital gains on short-term investments would, if enacted, have a disastrous effect on Wall Street trading and employment.

it can be rephrase as:

According to some analysts, whatever its merits, the proposal to X would have a disastrous effect on Y.

I have only confusion, can we assume that
its ==> proposal's

i can easily eliminate C,D, and E.

now come down to idiom:
proposal to
or
proposal of

so A or B will be the answer. preferably A, but i see no problem with B as well.
==> 'its' is so weird in both.

Whats the issue with B..............is it the use of may?
ideally it should be "might"

I agree with Sunny's analysis: the complete predicate is "would have" and the subject is "proposal"
B is eliminated because the idiom is "proposal to do something" rather than "proposal of doing something"; also "may be" is not needed so B is wordier

Pls help,

the idiom is "whatever noun" or "whatever noun maybe",????
pls, help