http://www.cbafaq.com/salarycap.htm
I think the Cavs aren't paying luxury tax because of retaining drafted players, they are paying the luxury tax because they are over the "Cap maximum" and "luxury tax threshold" from paying everyone else. I don't know though, I get confused going through all this stuff

There are current penalties besides just the additional tax if you are over the luxury threshold. Stuff such as not being able to sign a mid-level exception to contracts longer than 3 years, etc. But these only start when you are over the "apron", which I guess is $4M over the luxury cap. You can no longer do a sign and trade if you are over the apron as well. Basically it seems there aren't enough penalties other than money if you go over the luxury threshold. It obviously hasn't stopped teams like the Cavs from continuing to blow through it.