You're presenting a false dichotomy. It is because we live in Christ that we can be courageous enough to confess that we are sinners.
1 John 1:8
If we say that we have no sin, we deceive ourselves, and the truth is not in us.
Jesus answered your question in Luke 18. The man who named himself a sinner went home justified. The other man who thought himself otherwise did not.
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It's not a false dichotomy. It's a true dichotomy. When a person prior to Christ identifies as a sinner, admitting it is confession of what's true and the mercy he needs. And the Pharisee, pretending he's not a sinner prior to Christ, is lying. But once a man comes to Christ, admits he's a sinner in need of salvation, accepts Jesus as his Lord and Savior, and is born again and becomes a child of God, his old sin identity is crucified with Christ. And then the Father identifies that man through Christ, not sin, because no man can have two masters, and Jesus said, "I am the way, the truth, and the life. No man comes to the Father except by me." Therefore my dichotomy is correct, but your categories and sequence are wrong.