Why Only God Can Forgive All Sin
Jesus' claim to be able to forgive sins was another way of saying, "I'm God." That was no small claim and it stirred up reactions of worship and murder.
I can forgive someone only for a sin they committed against me. But I cannot forgive them of sins they commit against others, because those sins were not directed against me. But God can forgive all sins for the simple fact that all sin is directly against God, whether intentionally or not. And even my forgiveness offered toward someone who sinned against me may reconcile me with him, but it cannot and does not reconcile him with God. So his sin may be forgiven horizontally and consequently create a temporary peace. But it does not fix his bigger problem of being at odds with His Creator.
This is why confessing sins to a priest is a horrible practice. It implies that this priest has power to offer forgiveness of sins. But he doesn't because he is not God. Only Christ could do that.