What does Proverbs 17:26 mean?

In this verse Solomon condemns the government official who punishes a righteous person for doing what is proper. In Solomon's era, the only ones who could "strike a noble" were more highly exalted noblemen or kings. So, this proverb also rebukes the higher-ranking officer who punishes a lower officer for acting with integrity. This fits with other statements denouncing perversions of justice (Proverbs 17:7, 8, 15, 23). It's immoral and shameful for those in power to use their position to attack those who do good (Proverbs 14:34). Whether that is inspired by greed or spite, it's a despicable act.

Such practices are not only sinful, but they also create deep resentment. After Solomon's death, the Israelites asked Solomon's son and successor Rehoboam to lighten the people's financial burden. Some apparently thought Solomon's taxes were excessive (1 Kings 12:1–5). Rehoboam sought advice from Solomon's advisors. They suggested a tax reduction to help the people. Instead, Rehoboam followed the cruel advice of his friends (1 Kings 12:6–11). To flaunt his power and authority, Rehoboam instead made the taxes much higher (1 Kings 12:12–14). While taxes are not the same thing as "fines," harsh taxation and unjust fees are an unfair and heavy burden on citizens. Rehoboam's choice led to the division of the entire kingdom (1 Kings 12:16–20).