PARIS — French lawmakers are set to approve President Sarkozy’s first legislative proposal, a package of more than $18 billion of tax cuts to spur economic growth.

The plan would scrap charges on overtime hours, introduce a tax deduction for mortgage-interest payments and eliminate most inheritance taxes. After the vote, the bill will go to the Senate.

“We’re embarking on a path of fundamental reforms which we hope will generate a confidence shock, growth, and create jobs,” Finance Minister Christine Lagarde told reporters in Brussels July 10.

The majority from Sarkozy’s Union for a Popular Movement Party are overcoming Socialist Party objections that the proposals will widen inequalities and fail to spur demand. Mr. Sarkozy has countered concern from European neighbors that he’s retreating from France’s commitment to reduce the budget deficit.

The Organization for Economic Cooperation and Development says France will lag behind euro-region expansion for a second year in 2007, projecting growth of 2.2% this year, compared with 2.7% for the currency bloc as a whole.

The tax cuts will trim government revenue by between 10 billion euros and 11 billion euros in 2008, and by 13.6 billion euros “at cruising speed,” according to Ms. Lagarde.

France’s deficit will slip to 2.4% of gross domestic product this year from 2.5% last year and decline again in 2008, Mr. Sarkozy told E.U. finance ministers on July 9. Mathilde Lemoine, an economist at HSBC France in Paris, sees it at 2.9% next year, near the European Union’s ceiling of 3% of GDP, while expecting growth of 1.8% for both 2007 and 2008.

Mr. Sarkozy ‘s predecessor, Jacques Chirac, had pledged to trim the deficit to 1.8% in 2008, and to balance the budget by 2010. Mr. Sarkozy pushed back the date to 2012, though he said he’d try to meet the 2010 goal.

To reduce the deficit, Ms. Lagarde said she’d halve the pace of public spending growth to 1% above the inflation rate.

Cutting all income tax and payroll charges on hours worked beyond the 35-hour legal weekly limit will cost as much as 6 billion euros a year, according to Ms. Lagarde.

The measure allowing a limited tax deduction for mortgage-interest payments will trim government revenue by 3.7 billion euros, and the reduction in inheritance taxes will cost 2.2 billion euros, Ms. Lagarde said.

The other provisions in the bill would make money earned by students free of tax, establish a tax ceiling of 50% of total income — down from 60% — and allow taxpayers to deduct from their wealth tax their investments in small companies.

The government also earmarked 40 million euros for the break on student revenue.