You should be able to do that by setting up 5 different promotions and using "Discount priority", "Exclusive within this priority", and "Maximum uses per customer (0=unlimited)" parameters to create stages of promotions. Example as follows.

Promotion 1 (should cover years 2-4)
Basic
Promotion Type: Applies to all purchases
Discount Rate in PERCENT (%): 10
Discount priority: 2
Exclusive within this priority: Yes, no other promotions with same priority and lower ordering can apply same time
Maximum uses in total (0=unlimited): 0
Maximum uses per customer (0=unlimited): 3
To which plans this promotion applies: YOUR_PLAN_HERE
Advanced
Applies to registrations: No
Applies to upgrades: No
Applies to renewals: Yes

Promotion 2 (should cover years 5-7)
Basic
Promotion Type: Applies to all purchases
Discount Rate in PERCENT (%): 20
Discount priority: 2
Exclusive within this priority: Yes, no other promotions with same priority and lower ordering can apply same time
Maximum uses in total (0=unlimited): 0
Maximum uses per customer (0=unlimited): 3
To which plans this promotion applies: YOUR_PLAN_HERE
Advanced
Applies to registrations: No
Applies to upgrades: No
Applies to renewals: Yes

Promotion 3 (should cover years 8-9)
Basic
Promotion Type: Applies to all purchases
Discount Rate in PERCENT (%): 30
Discount priority: 2
Exclusive within this priority: Yes, no other promotions with same priority and lower ordering can apply same time
Maximum uses in total (0=unlimited): 0
Maximum uses per customer (0=unlimited): 2
To which plans this promotion applies: YOUR_PLAN_HERE
Advanced
Applies to registrations: No
Applies to upgrades: No
Applies to renewals: Yes

Promotion 4 (should cover years 10+)
Basic
Promotion Type: Applies to all purchases
Discount Rate in PERCENT (%): 40
Discount priority: 2
Exclusive within this priority: Yes, no other promotions with same priority and lower ordering can apply same time
Maximum uses in total (0=unlimited): 0
Maximum uses per customer (0=unlimited): 0
To which plans this promotion applies: YOUR_PLAN_HERE
Advanced
Applies to registrations: No
Applies to upgrades: No
Applies to renewals: Yes

Note make sure they are ordered exactly as shown above as they need to take priority 1 by 1. You may also need to add a condition under Conditions to only apply to an existing plan, but shouldn't be needed. I did not test the above, but in theory should work since priority only allows 1 of these promotions to be applied and it should work its way through them.

Just to confirm, Discount Priority for all promotions should be the same (2) as in your example?

Yes.

If I may ask a follow up question: This membership is for organic farms. It puts their information on a list so volunteers can find and contact them. Sometimes these farms want to take a 1 year break from being listed. There is a small fee for them to remove themselves from the list for up to a year, but they have the choice of rejoining their previous membership at any time and being listed again.

I created a separate plan called BREAK and made it as an upgrade possibility. That works fine, but when that plan is activated for them, I cannot get the previous base plan with all the discounts to show up as an option in their Membership tab so they can choose to be relisted.

Ensure both plans are set to be Exclusive then under Workflows ensure both have the following set. Should allow going back and forth as needed.

Allow upgrade to this: Yes
Propose plan for upgrades only if it is more expensive: No: It will be possible to upgrade to this plan (for free with pro-rating) if all conditions below and elsewhere are met
Propose spontaneously plan for upgrades: Yes: show automatically plan for normal upgrades (recommended)