Now, I have reported the post to the moderators, and it will probably get deleted, at least it should because I have also submitted proof for it, but the user will still have the merits received for that post, and I think he doesn't deserve that.
Below is a snap that I took of the post I'm talking about for reference in case the post gets removed by moderators:
Moderators will delete these posts if they consider your reports are good and these posts are shitposts. Merit will stay but in merit history, you will see it's as "(Deleted/Off-limits/Ignored)".
With the user, he will very possibly be banned and I have no issue with merit of a banned user. Sometimes, merit history will be helpful for checking too, so deduction of merits in your suggestion is not good.