My father is part of a volunteer dept. in the Southern Tier; they have 3 paid drivers so one is always on the clock, but the rest of the dept. is all volunteer. This keeps response times fairly quick (since no one has to first drive to the fire hall and pick up the truck) and also keeps costs down.
Where I live we have lots of paid fireman, and the taxes to go with it. I haven't had a use for them (knock on wood) yet.
It's also worth noting that at least 95% of the calls my Dad goes on are medical emergencies and not fire related.