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In terms of animation (strictly visual) I think the US/West has the edge. In Japan, all the animation is pretty homogenized. Same character style, same art style, color palette, etc. US has a pretty wide range of art styles which is really good.

In terms of story though, Japan wins out. Most US cartoons fall into a few categories. You have inanely random shows, kids action shows, kids comedy shows, and Simpsons inspired sitcoms. With Japan, you animation can be a medium for action, romance, comedy, drama, etc. Stuff like Serial Experiments, Death Note, Haibane Renmei, and Paranoia Agent show that they take animation a bit more seriously. Wish their art styles were as varied as the stories.