How would you translate this sentence?
That is nothing to be proud of.
I can only think of
(a) Das ist nichts, auf dem man stolz sein soll.
Are there better ways to translate it?
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A good and fluid translation would be
Das ist nichts, worauf man stolz sein sollte.
The subjunctive is crucial here because this is your own/ society's opinion. Using the indicative mode is impolite - if you are not talking to a child that has done something rude.
Your translation would be fine, too, but make sure to use the subjunctive and use the accusative instead of dative.
Das ist nichts, auf das man stolz sein sollte.
Until now, I presumed that your sentence is meant to critizise someone. If I am not mistaken, it could also express a humble self-critique. In this case, könnte instead of sollte would be better.
In Yiddish we have the following idiomatic expression
"Das is nischts, auf was zu stolzieren."
Note that in German the general meaning of stolzieren is lost. It is only used in the context of walking ("strutting").
More idiomatic is "Das ist kein Grund zum Stolz."
German loves nominalization, and in this case it's actually shorter and sweeter.