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Harry Turtledove has a series of about a dozen book positing exactly this question. He's taken it up to the end of WWII which was a purely American affair (with the Kaiser still in power in Germany and an American analogy to Hitler).
However, I don't think that the US would necessarily have been a "more progressive" nation. The Republican party would have been shattered and set the progressive movement of the 1880's back decades awaiting a party to fill the void left by the Republicans. Tax wouldn't necessarily be lower since there would be a hostile nation to the south requiring a military buildup. There certainly would have been periodic arms races akin to what the French and Germans did towards the end of the 1800's.
I think that the CSA would have initially been propped up by the British and French but would then have been forced to industrialize along the same lines it did in the 30's and 40's. They couldn't have survived a sustained assault by the US without it, and in the post-Civil War era, that would have been enough motivation to force the change. Certainly slavery would have remained for a time, but it was unsustainable and eventually would have been abolished. The external pressure from Europe would have increased over time since the CSA would have been the only Western nation with slavery after 1862 (Russia), and I doubt that the British and French could have continued to offer unconditional support into the 1880's given their own domestic issues with the practice.
Interesting topic. I'm curious to see where this goes since it's one of my own little hobbies.
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