Thank you all very much for your helpful comments and showing where I went
wrong. After so many trials, the code below seems to work:
incorp <- with(data7.13.11, 
                   ifelse(groupinc %in% c(5), 'cons', 
                          ifelse(groupinc %in% c(-3,-2) & indinc < 9,
'ethnat', 
                                 ifelse(groupinc %in% c(1,2,3,4) & indinc >
8, 'libmul', 
                                        ifelse(groupinc %in% c(-2,-1) &
indinc > 8, 'civic', 
                                               NA)))))

Let me know if it's just an illusion on my part




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