[讨论]the use of whatever

1.        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（A）

(E) the proposal’s merits are, taxing

In question:

what is the subject of the verb GAINS? Could PROPOSAL gain incestments? How the verb WOULD HAVE relate gains?

What is the function of  "Whatever its merits" ?

What is the matter?

PS:

The given answer is A

My answer is E.

Looking for help.