How to do multi-level incremental backups with gnu tar?

Question

I'm wondering if anyone is actually using gnu tar to do multi-level incremental backups. All of the examples I have seen show only a single level of incremental backups.

If I want full backups yearly, and incremental backups monthly, weekly, and daily, what is the proper way to do it? Do I need to use a separate catalog for each, or is changing the level sufficient? Which way should the level numbering go? e.g.

        level
yearly   0
monthly  1    Using catalog created when yearly written
weekly   2    Using same catalog
daily    3    Using same catalog

or

yearly   0
monthly  3    Using catalog created when yearly written
weekly   2    Using same catalog
daily    1    Using same catalog

or

yearly   0  catalog-0
monthly  1  catalog-1  copied initially from catalog-0
weekly   1  catalog-2  copied initially from catalog-0 (or catalog-1?)
daily    1  catelog-3  copied initially from catalog-0 (or catalog-2?)

Or some other combination?