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It's really not something you can put a "this is better than that" label on. They are both hit or miss.

AMERICAN cartoons tend to have the cream of the crop, at least historically, with The Last Airbender, Batman TAS, and two or three other truly excellent series. They also tend to have the most crap that try to knock off Family Guy, Futurama, or South Park...but only manage grotesque.

And then there's the avant garde stuff like Aqua Teen Hunger Force. Quite the mixed bag, really.

JAPANESE cartoons are a much tighter bunch storytelling wise. It's inherently more formulaic, with the best of the best focusing on using formulae well rather than reinventing the wheel. Also, the animation itself can vary greatly, as Japanese anime tend to cut corners on their animation and focus heavily on the fight sequences.

In my opinion, the best of Japanese anime is only a whisker weaker than the best American stuff, but while they both have dredges, I find the Japanese terrible stuff to at least be enjoyably terrible. They both have their place, but most of the series I consciously steer clear of are American, not Japanese. Japanese anime may not hit "excellent" that often, but it certainly has more "very good" stuff than America.